Romania ponders new loan moratorium for troubled debtors

The Government, the Ministry of Finance, the banks and the National Bank of Romania (BNR) are reportedly discussing the option of another moratorium on bank loans to help individuals and companies weather the adverse circumstances, including high inflation, high energy prices and the war in Ukraine.

Rising interest rates are particularly likely to put pressure on debtors. A similar moratorium was enforced during the first year of the pandemic and allowed debtors to reschedule their loans while having a small portion of the dues waived (namely, they paid in zero-interest instalments the interest accrued during the moratorium).

According to sources familiar with the talks, quoted by Ziarul Financiar, the parties have met twice so far, and a new meeting will follow at the beginning of this week.

The ruling majority and the Government want to issue this ordinance as soon as possible. But the banks are not as comfortable with the new moratorium since this time they may have to build up provisions for the loans reschedule.

In 2020, the European Banking Authority (EBA) waived the obligation to set aside provisions for the loans deferred, which is not the case now.

On the other hand, the Government has fueled the banking system’s operations over the past year, which resulted in the record profits boasted in 2021.

Similarly, the Government is preparing another set of schemes by which it is going to guarantee and partly subsidise companies’ investments and working capital loans.

(Photo: Shutterstock)