CBE announces postponing credit liabilities for 6 months
Sun, Mar. 22, 2020
CAIRO – 22 March 2020: The Central Bank of Egypt (CBE) clarified Sunday the main points regarding the postponement of customer credit liabilities for a period of 6 months.
CBE defined credit entitlements or liabilities as all amounts due to be paid for all credit facilities, whether short-term, or current or future loan installments, in addition to returns, so that all entitlements and payment schedules are automatically posted starting from the date the instructions are issued and for a period of 6 months. The decision also included notifying clients through any available means of communication.
The central bank explained that the instructions apply to all clients, whether regular or irregular individuals and institutions, including financial leasing companies, real estate financing and factoring, medium and small companies. The instructions also apply to the facilities entitlements granted in all types of guarantees, as well as clients of initiatives issued by the Central Bank.
According to CBE, the facilities of individuals are consumer loans, which are personal loans; credit cards, car loans for personal use; and mortgage loans for personal housing.
"The new instructions do not apply to loans that were granted starting from the date the instructions were issued,” it clarified.
The central bank stressed the banks' commitment not to impose any returns or commissions due to the postponement. The rate of return applied to loans is calculated only according to the contracted pricing mechanism at the time of the instructions issuance, provided that the customer is informed of the additional cost that he will bear as a result of the postponement.
It pointed out that in case the client does not wish to benefit from the delay or incur an additional cost resulting from it, his request will be complied with.
On Mar. 16, CBE has obliged all local banks to delay the collection of credit liabilities for six months.
"The move is part of the state's precautionary measures against the novel coronavirus (COVID-19) outbreak," CBE Governor Tarek Amer said.