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What is the Institution for Suspension of Installments for Certain Beneficiaries

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What is the Institution for Suspension of Installments for Certain Beneficiaries

Today, the Minister of Finance, Konstantinos Petridis, issued the decree for the suspension of installments for certain Beneficiaries.

Specifically, the Minister of Finance, on the basis of a decision of the Council of Ministers with the consent of the Central Bank, exercising the powers provided to him by Article 5 on the Taking of Suspension Measures by Financial Institutions and Supervisory Authorities, Law 2020, issued:

“On the Taking of Emergency Measures by Financial Institutions and Supervisory Authorities, (Suspension of Installments for Certain Beneficiaries) Decree of 2021”.

Main Provisions of the Decree:

Exceptional measures of this decree exclude natural persons, legal entities under public law, Independent Employees and Businesses, who have submitted an expression of interest based on the Decrees of 2020, their expression of interest has been approved by the financial institutions and have completed a period of nine months. suspended.

The extraordinary measures of this decree cover only credit facilities granted and / or purchased and / or managed by licensed credit institutions, credit acquisition companies, the Cyprus Land Development Agency and by non-credit institutions and credit intermediaries for credit in relation to Properties intended for Residence.

Suspended for some

(j) natural persons,

(ii) legal persons governed by public law;

(iii) Independent Employees and Businesses (the beneficiaries),

the obligation to pay the installments including interest on credit facilities granted and / or purchased and / or managed by financial institutions which fall into the following categories:

Credit facilities for individuals or Small and Medium-sized enterprises regardless of the purpose with a mortgage on the main residence with a market value of up to € 350,000.

Credit facilities for business purposes to companies and self-employed persons whose operations are subject to mandatory suspension on the basis of the Infection Cleaning (Definition of Measures to Prevent the Spread of Coronavirus COVID-19) Decree (No. 2) of 2021 issued by the Minister of the Law on Disinfection (Chapter 260) on January 8, 2021.

Credit facilities for business purposes to companies in the hotel industry, which are governed by the Law on the Regulation of the Establishment and Operation of Hotels and Tourist Accommodations.

Credit facilities falling into categories (i), (ii) and (iii) above, the beneficiaries of which submitted an expression of interest under the 2020 decrees, whose expression of interest was approved by the financial institutions and which did not request the amount of the installments of the credit facility to the credit institution that was payable and paid between March 30, 2020, the date of publication of the Extraordinary Suspension Measures by Financial Institutions and Supervisory Authorities within the 2020 Decree, and the date of their of 2020.

It is understood that this Decree also covers syndicated loans that have been granted jointly by financial institutions as well as loans that were concluded in Cyprus and which are governed by foreign law and belong to the categories of this paragraph.

It is further understood that the duration of the suspension period does not exceed 9 months.

In addition to the above, the suspension of the obligation to pay installments to the beneficiaries mentioned presupposes the absence of delays in the payment of the installment beyond 30 days from the date provided by this credit facility on December 31, 2020, but face financial difficulties as a result the effects of the COVID pandemic – 19.

Without prejudice to subparagraph 2 (b) of paragraph 3 of the Decree, beneficiaries who have maintained credit facilities which at 31 December 2020 were more than 30 days in arrears may request the suspension of the obligation to pay the installment and interest, provided that the total at the level of the financial institution referred to in subsection 1 (c) of paragraph 3 of the Decree, shall not exceed one hundred euros (€ 100) for retail banking loans and five hundred euros (€ 500) for business loans.

The installment and interest suspension is effective from 1 January 2021 and excludes credit facilities signed after 30 March 2020 provided that the beneficiaries send in writing either by e-mail or by mail or by fax to the financial institutions mentioned in this expression of interest. Annex to this Decree: It is understood that, by submitting the request for expression of interest to the financial institution, which must be submitted no later than January 31, 2021 and provided that the borrower meets the required criteria, the borrower's right to suspension of installments and interest from 1 January 2021.

It is further understood that the decision of the financial institution on the requests for suspension of the repayment of installments and interest is carried out, by February 28, 2021 at the latest. If deemed necessary according to the developments, the time limit for the submission of the expression of interest and the taking of the relevant decisions by the financial institutions can be extended with the issuance of an additional Decree of the Minister.

It is further understood that the installments of the credit facility payable from the date of issue of this Decree onwards, and paid by the Borrower before the date of submission of the expression of interest to the Financial Institution, shall be repaid by the Financial Institution if the the borrower. If the borrower does not wish to repay these amounts, they remain as payment against the contractual installments for which they were paid.

It is further understood that the financial institution has no right to reject the expression of interest unless the borrower does not meet the criteria set out in this paragraph.

The terms of the existing loan agreement except for the repayment term as well as all relevant collateral documents will continue to apply both during the suspension period and after the end of the installment suspension period.

It is understood that all interest accrued on the date of expiry of the Decree will be added to the balance of the loan and all suspended interest and principal installments will not become immediately due unless agreed different between the beneficiary and the financial institution.

It is further understood that, on the expiration date of the Decree, the payment of installments and interest resumes and at the same time the repayment period is considered to have been automatically extended for as long as necessary to finally repay the capital and interest so that the installments are not differentiated. after 01/07/2021 but to continue the loan to be serviced in accordance with the terms of the existing relevant loan agreement and the agreed repayment schedule.

It is further understood that, despite the aforementioned suspension and during its validity, the borrower reserves the right, with relevant information to the financial institution, to pay or pay voluntarily any amount or amounts against or to repay the installments and / or interest which – in the absence of such suspension – would be payable / payable under the terms of the relevant credit facility agreement and such amount or amounts are presumed to be prepaid against the repayment schedule.

The taking of measures by financial institutions to recover the credit facilities covered by this paragraph and for which the right to refuse the expression of interest has not been exercised, in accordance with sub-paragraph (d) of sub-paragraph (2) of this paragraph, shall be suspended. by a financial institution referred to in sub-paragraph (c) of sub-paragraph (1) of this paragraph of the Decree. Failure to pay installments during the period of suspension does not in any way constitute a breach of the terms of the contract between the beneficiary and the financial institution.

The emergency measures last from January 1, 2021 until June 30, 2021.

The Decree which includes the Expression of Interest form for Suspension of Installments, is attached as is.

Source: www.philenews.com

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