April 3 (SeeNews) - The Bulgarian National Bank (BNB) said on Friday that it has asked local commercial lenders to propose a set of rules on a moratorium that would defer loan repayments for a certain period in order to mitigate the impact of the coronavirus crisis on borrowers.
Banks in Bulgaria must come up with an agreed set of rules within a five-day period, in line with European Banking Authority (EBA) guidelines, the central bank said in a statement
The rules, after their approval by the BNB, will provide banks with the flexibility to offer loan repayment reliefs to their clients for a certain period in the context of the current crisis sparked by the global spread of the novel coronavirus disease (COVID-19).
Details on the loan repayment reliefs intended for individuals and legal entities will be announced with the publication of the rules of the moratorium, the BNB said.
"The EBA sees the payment moratoria as effective tools to address short-term liquidity difficulties caused by the limited or suspended operation of many businesses and individuals resulting from the impact of COVID-19," the EU banking authority said in a statement on Thursday.
The EBA guidelines clarify that payment moratoria do not trigger classification as forbearance or distressed restructuring if the measures taken are based on the applicable national law or on an industry or sector-wide private initiative agreed and applied broadly by the relevant credit institutions, it noted.
Last month, Bulgaria's central bank unveiled a set of measures worth 9.3 billion levs ($5.1 billion/4.8 billion euro) that are intended to maintain the stability of the banking system amid the COVID-19 pandemic.
The measures also aim to strengthen the flexibility of the banking system in order to reduce the negative effects on both businesses and individuals stemming from the restrictions imposed on the economy because of the COVID-19 spread, the BNB said back then.
In the period between March 13, when the government declared a countrywide state of emergency over the COVID-19 spread, and April 1, a total of 31,643 people have registered with labour offices in Bulgaria, with 17,793 of them saying their jobs were axed due to the coronavirus crisis, Nova TV quoted labour minister Denitsa Sacheva as saying on Tuesday.
The government said earlier this week it will propose to parliament to extend the state of emergency by a month until May 13.
(1 euro = 1.95583 levs)
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