Moratorium on loan repayment and benefits to bank clients during the Government of Montenegro’s interim measures to mitigate the effects of the new coronavirus pandemic


What does a moratorium on loan repayment offered by banks enable?


The loan repayment moratorium enables any interested natural and legal person to delay the loan repayment for up to 90 days. Therefore, entities who accept the moratorium do not have an obligation to pay their loan obligations (principal, default interest, fees, etc.) for up to 90 days.


The moratorium is an opportunity for any natural and legal person affected by the current situation to delay the payment of their obligations temporarily, ease their financial situation, and avoid their debts becoming due.



Who is entitled to the moratorium?


Users of all bank loans types (cash, housing, loans to pensioners, consumer, investment, working capital loans, liquidity loans, credit products related to card usage, etc.), and users of financial leasing recipients and loans granted by micro-lending financial institutions have the right to the moratorium. 



How do I exercise the right to a moratorium?


The loan beneficiary wishing to exercise the right to a moratorium does not need to visit the bank’s branch.


Citizens submit a request to activate the moratorium by phone, sending an email, or sending the application by registered post. The websites of individual banks’ provide more detailed instructions on how to apply, including contacts through which interested parties can exercise the right.


The bank is obliged to ensure the moratorium execution within five working days of the request receipt. The beneficiary also sends the moratorium acceptance notice to the employer or other person through whom the loan is repaid, in the same way as to the bank (by phone, email, or registered mail). During the moratorium, the employers and other persons through whom the loan is repaid have to suspend payments related to the loan repayment granted by the banks within five working days.


Even though the moratorium applies to all clients, clients with a relatively stable income not affected by the crisis adversely can continue to repay their obligations without exercising the right to a moratorium.



What is the repayment model after the moratorium?


The contracted conditions for loan beneficiaries exercising the right to the moratorium will not change, while the repayment term will be extended for the moratorium duration.


During the moratorium, the bank will calculate a regular contracted interest rate. When the moratorium ends, the calculated interest rate will be added to the main debt and distributed evenly over the remaining loan repayment period.


Loan beneficiary will continue to repay the loan after the moratorium expiry under the new repayment plan provided by the bank.


The bank shall not require or charge from the Borrower any administrative costs related to the moratorium use, including any cost of any Collateral Agreement annexation.



Do bank customers have any other benefits during the interim measures?


The decision of the CBCG leaves clients affected by the coronavirus impact the opportunity to agree with the bank to restructure the loan if they consider that such a solution is more acceptable. To relax the banks in the process, the CBCG decided to treat these loans as newly approved loans, thus relaxing the banks’ expenses on provisions.


Another measure of the CBCG facilitates the acquisition of additional financial resources for the portion of loan beneficiaries affected by the current crisis. It provides an incentive to continue their operations. Specifically, through the granting of loans or otherwise, banks are allowed to increase their exposure to one person or a group of related parties beyond the statutory exposure limits (25% of the bank’s own funds), with the prior approval of the CBCG.