Through LN 142 of 2020, licensed credit and financial institutions have been directed to offer a six-month moratorium on repayment of capital and interest.
Through Legal Notice 142, entitled Moratorium on Credit Facilities in Exceptional Circumstances Regulations, 2020, credit and financial institutions licensed by the Malta Financial Services Authority have been directed to offer a six-month moratorium on repayment of capital and interest ‘to support economically vulnerable persons who have been materially affected by the COVID-19 outbreak’.
Pursuant to the Regulations, the Central Bank of Malta (CBM) has been given powers to issue directives in relation to such moratorium. Indeed, the CBM issued Directive 18 to define the eligibility for the moratorium and other conditions related to the implementation of the provisions of the Regulations. Hereunder are the details issued by the CBM.
The moratorium applies to credit facilities sanctioned prior to 1 March 2020 - whether to individuals, households or businesses - and who can show that they have been negatively affected by the pandemic. Applications by borrowers are to be made with their respective credit or financial institution until 30 June 2020. The Minister for Health, in consultation with the Minister for Finance and Financial Services, may decide to extend the duration of the moratorium and the duration of the application period. The six-month moratoria period will start with effect from the date of approval of the application.
These are some of the key points in the Directive:
Directive 18 was issued following consultations with the Malta Financial Services Authority and the Malta Bankers' Association.
The Bank has prepared a guide to explain the terms and conditions.
Read the full Directive.
Read the Legal Notice.
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