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Central Bank of Malta: Six-month moratorium on loan repayments
The Central Bank of Malta has issued a Directive to define the eligibility for the 6-month moratorium and other conditions related to the implementation of the provisions of the Credit Facilities Regulations in Exceptional Circumstances.
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:
- The moratorium is not granted automatically, and the borrower will need to apply to the respective credit or financial institution. The moratorium comes into effect once the application has been approved. Borrowers have until 30 June 2020 to apply. If you have already taken up a moratorium offered by your lender, but feel that the terms under the Directive are more advantageous, you can renegotiate the terms subject to agreement with the credit or financial institution.
- Credit and financial institutions have the right to refuse the application as long as this is done within the terms of the Directive. However, please note that borrowers who have been in arrears prior to 1 March 2020 are not eligible for the moratorium.
- Borrowers can apply to forego payments of both capital and interest completely for six months, and can also opt to continue to pay the interest but not the capital.
- The payments missed during the moratorium will be paid during a six-month extension to the term of the credit facility. If the credit facility was due to mature at retirement age, the missed payments would be spread evenly throughout the remaining term of the credit facility after the end of the moratorium period.
For more information visit the Central Bank website
For more information about the various banking measures, please visit here
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