All natural persons and a broad category of companies will be able to defer the payment of their bank loan installments by the end of the year, according to a law voted by the Parliament on Friday, April 3, according to Hotnews.ro.

The bill still needs to be promulgated by president Klaus Iohannis.

Notably, the law competes with an ordinance issued by the Government, which already produces effects but has to be endorsed (and can be amended) by the Parliament. 

A majority formed by the Social Democratic Party (PSD, the author of the bill), Liberal Democrat Alliance (ALDE), Pro Romania party and the ethnic Hungarians’ party UDMR voted for the bill in Parliament, while only the ruling Liberal Party (PNL) voted against.

PNL will ask the Constitutional Court to check the law, head of Liberal deputies Florin Roman announced, quoted by Adevarul daily. The bill fails to evaluate the impact on the budget and the financing source, Roman said.

The Government has already enacted an emergency ordinance that allows natural persons, suffering direct or indirect financial losses caused by the new coronavirus pandemic, and a broad category of firms to defer their bank loan installments for up to nine months. The Government has also passed the implementation procedures.

The Social Democrats’ law, endorsed by the Parliament on April 3, entitles, however, a broader category of legal persons and all natural persons to qualify for the grace period. Besides the firms directly subject to the ordinances issued under the state of emergency, those whose revenues dropped by 15% in March compared to January-February average are also eligible to benefit from the facility.

Furthermore, the law states that “the interest [accrued by banks on the principal, during the grace period] should not be capitalised at the end of the grace period”. It can be understood that the interest would be later paid in installments with zero interest rates - but this is not mentioned in the law passed by the lawmakers, which leaves this details somehow unclear. Under the Government’s ordinance, such a facility (non-capitalisation, repayment of interest in installments with zero interest rate) is given for natural persons’ mortgage loans only.

editor@romania-insider.com

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