Central Bank announces moratorium on deferred loans

THE Central Bank said a moratorium on deferred loans is in effect until September 30.

The bank also said it will be speaking with commercial banks in the coming weeks "to discuss the detailed plans being put in place for monitoring and managing credit and liquidity risks and capital both during and after the moratorium period."

In a a May 7 circular letter, the bank said it was concerned about "the difficulties currently being faced by our national community as we face the effects of the ongoing pandemic and the potential hardship that it presents to customers of financial institutions."

The bank recalled that it previously extended an initial moratorium on deferred loans by letter dated March 24, 2020 and this was subsequently extended twice last year, ending on December 31, 2020.

But the bank said, "Having regard to the new circumstances, the Central Bank considers it appropriate to reintroduce a moratorium on the regulatory treatment for rescheduled loans due to 'skipped payments' or rate reductions and past due facilities for the period May 1, 2021 to September 30, 2021."

The bank asked financial institutions to note certain conditions apply during the moratorium. These include deferrals offered to customers during the moratorium must expire on September 30, regardless of the actual date when the deferral began; borrowers who were current before the new moratorium period and who subsequently accepted the 'skipped payment' provision as a result of the effects of covid19 generally should not be reported as past due.

In a brief statement on Friday, RBC said, "RBC Royal Bank does not currently have plans to reintroduce a mass loan deferral programme."

It added, "However, if clients are experiencing financial challenges in meeting their loan obligations, we encourage them to reach out to an RBC representative for assistance."

In a separate statement, Republic Bank general manager (group marketing and communications) Karen Tom Yew said, "Republic Bank will continue to comply with all guidelines issued by the Central Bank of Trinidad and Tobago as we support those impacted by the pandemic."

Questions were sent to the Bankers Association and other commercial banks about the moratorium. Up to publication time, there were no responses from these organisations.