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Postponement of loan and other payments for financial institutions due to Covid-19

Postponement of loan and other payments due to Covid-19

Banks and other financial institutions to postpone credit duties to businesses and individuals

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Opportunity for companies to postpone loan payments up to six months without changing interest

On 23 April 2020 the Association of Lithuanian Banks  comprising AS „Citadele banka“ Lithuanian branch, „Danske Bank A/S“ Lithuanian branch, LKU Credit union group, „Luminor Bank AS“ Lithuanian branch, UAB Medicinos bankas, „OP Corporate Bank plc“ Lithuanian branch, UAB „OP Finance“, AB SEB bankas, „Swedbank“ AB and AB Šiaulių bankas signed the Temporary Payment Moratorium for legal entities. The moratorium came into power on 24 April 2020 and will remain in effect until 1 July 2020. It is applicable in respect of agreements signed before the announcement of the COVID-19 quarantine by the Government of the Republic of Lithuania, i.e. before 16 March 2020.

The Moratorium is applicable for loans which allow partial repayments, including financing instruments for working capital with an obligatory decreasing utilization limit (except when an entire loan is repaid at the end of the period). The Moratorium is also applicable for leasing arrangements establishing interim terms for repayment of the value of the leased asset.

The aforementioned credit institutions undertake to postpone loan and lease payments to companies for up to 6 months. The Moratorium applies to financial obligations of up to EUR 5 million per group of companies.

The Moratorium shall not apply if the credit institution concludes that the client's financial difficulties existed before 16 March 2020 or are unfeasible (client’s ability to fulfil obligations is low).

The client granted with the postponement of the loan repayment under the mentioned Moratorium shall not make any payments to its participant(s) and / or persons related to them for the period of postponement and  6 months thereafter without a prior consent of the credit institution.

In order to apply for such postponement a company must refer to the respective credit institution and disclose its financial factors caused by the COVID-19 pandemic.

The full text of terms and conditions of the Moratorium is accessible here.

Temporary Moratorium for private persons

On 17 April 2020 the Association of Lithuanian Banks comprising „Danske Bank A/S“ Lithuanian branch, LKU Credit union group, „Luminor Bank AS“ Lithuanian branch, UAB Medicinos bankas, AB SEB bankas, „Swedbank“ AB and AB „Šiaulių bankas“ signed the Temporary Moratorium for private persons. The Moratorium came into force on 20 April 2020 and will be valid until July 1, 2020.

Under this Moratorium all private individuals properly fulfilling payments prior to the quarantine, however facing financial difficulties due to the coronavirus situation, and having lost their jobs or part of their income, can, after informing their financial and credit institutions in writing, have the repayment of the principal part of their home loan postponed for up to 12 months. For consumer credit and leasing, institutions will apply postponements for up to half a year during the Moratorium period. During the postponement period, the client will only have to pay interest and other periodical payments.

The full text of terms and conditions of the Moratorium is accessible here.

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