Ukrainian banks are massively introducing credit holidays for those who received a loan before the war or regularly use a credit card.
However, credit holidays do not mean debt cancellation, just for non-payment in wartime, a fine will not be charged, reports the Chronicle.info with reference to Focus.
Military Russia's aggression led to high risks of deterioration in the loan portfolios of Ukrainian banks, because mass layoffs of company employees and the cessation of enterprises led to difficulties in repaying loans to borrowers. Most banks offered their clients to take advantage of credit holidays, however, the validity of such an offer in some banks was limited on March 31.
Which banks extended the grace period for paying credit debts for individual clients?
The letter of the law: how legislation regulates the credit issue
On March 15, the Verkhovna Rada adopted Law No. 2120-IX «On Amendments to the Tax Code of Ukraine and other legislative acts of Ukraine on the operation of norms for the period of martial law». This is an important document because it changed some of the rules for the operation of banks and non-banking financial institutions. In particular, we are talking about loans for individuals.
«The law provides that for the duration of martial law and within thirty days after the day of its termination or cancellation, the consumer will not be liable to the lender in the event of a delay in fulfilling consumer loan obligations. In addition, if such a delay is allowed, the consumer is released, in particular, from the obligation to pay the lender a penalty (fine, penalty fee) and other payments, the payment of which is provided for by the consumer loan agreement for the delay in performance (non-performance, partial performance) by the consumer of obligations under such an agreement. 187;, — reported in the National Bank of Ukraine.
Thanks to the new law, banks are not only prohibited from charging fines for non-payment on loans, but also to increase the interest rate for using a loan.
However, this does not apply to contracts that provide for a floating rate (often these are the terms of mortgage contracts).
Nevertheless, the NBU emphasizes: debt does not disappear anywhere, it only accumulatesif the client misses the monthly obligatory loan payment. And if the borrower has the financial capacity, it is better to pay off the obligations in a timely manner.
«It is important that the new rules do not provide for the abolition of interest for the use of credit funds. Such an accrual is lawful on the part of the creditor. Credit holidays are a deferral of debt payment, and not its forgiveness», the NBU emphasizes.
Which banks have introduced credit holidays and how much. What does this mean for borrowers
Banks reacted differently to changes in legislation. Some set credit holidays for a month, others for two or three months. Some banks (for example, PrivatBank, as well as «Universal Bank» for the cards of the monobank project) canceled interest on credit cards altogether in March. However, this decision was temporary and situational, and in April, banks informed customers that interest on card loans was being returned.
- PrivatBank introduces credit holidays until June 1
«The economic front is also very important for victory. Therefore, from April 1, we partially returned some tariffs, while reducing them compared to the pre-war level. For example, a preferential loan rate has now been set at 1.7%, which is half of what it was before the war. Interest will be accrued in May as well, but repayment of the payment will not be obligatory until June 1 due to the credit holidays», the new conditions for credit cards were reported in PrivatBank.
The same bank confirmed that from March 1 From 2022 until June 1, 2022, we introduced credit holidays for individuals on all credit cards. That is, it is not necessary to make a mandatory minimum payment, there will be no penalty for non-payment. Although the bank convinces customers to continue paying off the debt.
«We ask you to repay the debt at least partially, because the bank must work. We also continue to bear full responsibility for the deposits of Ukrainians, regardless of the circumstances», they say in PrivatBank.
- The bank «Pivdenny» told that credit holidays for individuals are valid until May 31, 2022.
«For credit cards, credit holidays are introduced for three months with the following repayment mechanism: a mandatory minimum payment is set at UAH 0; interest rate – unchanged, but interest can be paid until May 31, 2022; commissions unchanged; the validity period of credit limits is automatically extended until May 31, 2022, while maintaining the automatic reduction mode», — said the director of the retail business department of the bank«Pivdenny» Igor Fomichev.
- OTP Bank extended credit holidays for all retail loans until April 30.
The bank noted that if customers fail to make the minimum planned payment on the loan, according to the schedule, its delay and entering this information into the credit history will not occur. And fines, penalties or higher interest rates will not apply. However, the bank draws the attention of borrowers that loan holidays do not provide for exemption from repayment of loan funds and payment of interest for using them, but only allow you to postpone the payment date.
- In Kredobankexplained that the bank has canceled the accrual of fines and penalties for late payments by individuals on all loans, and the loan holiday period is 90 days (from February 28 to June 1, 2022).
« ;Credit holidays are applied to the payment of the principal amount of the debt on all loans issued to individuals, with the exception of loans against a deposit», — said the press service of Kredobank. As for credit cards, Kredobank operates a scheme according to which the minimum payment for using credit funds on a credit card is 0% of the loan body plus accrued interest and overdue payments for previous periods.
Credit holidays are set by the bank automatically until June 1, and there is no need for additional actions on the part of customers.
Thus, for most customers of Ukrainian banks in April and May 2022, preferential conditions apply when you can skip loan payments. However, this does not mean the cancellation of debt or the complete abolition of these payments or interest. Credit holidays are a temporary measure to support customers who, due to military aggression, cannot pay off their loans on time.