COVID-19: EMERGENCY MEASURES TAKEN BY FINANCIAL INSTITUTIONS (30/03/2020)
The Emergency Measures taken by Financial Institutions and Financial Regulators Law of 2020 (No. 33(I)/2020) of the Republic of Cyprus sets the provisions on the suspension of monthly instalments, including the payment of any interest on credit facilities and offers protection to borrowers from the distress that is caused due to the coronavirus crisis.
This provisional Law is enforced as from 30/03/2020 and will be valid until 31/12/2020.
The application of the emergency measures in accordance with the Order under Article 5 of the Law by the Minister of Finance:
- The obligation to pay monthly instalments, including payment of any interest on credit facilities (loans) which are granted and/or exchanged and/or are being managed by Financial Institutions, is suspended for physical persons, legal entities as well as public legal entities, independent contractors and businesses (“the beneficiaries”).
- Beneficiaries are those who did not fall into arrears for any monthly instalment payment for more than 30 days from the date on which the loan agreement indicates by the 29th of February 2020, as they face economic disruption due to the coronavirus crisis.
- An application of declaring interest for suspension may be sent by the beneficiary in writing either by fax or email or post to the Financial Institution. These applications can be found on the websites of Financial Institution.
The total amount of the interests for which payment is suspended, will be added to the loan balance however, it will not be immediately payable, unless agreed otherwise between the beneficiary and the Financial Institution.
The existing terms of the loan agreement and documents provided as reassurance for the loan agreement, will continue to be enforceable during the suspension period and after its expiration, excluding the terms of payment.
It is understood that the period of settlement of the loan will be automatically extended, unless agreed otherwise between the beneficiary and the Financial Institution.
The beneficiary, despite the suspension, during the suspension period and provided that the Financial Institution is informed, may deposit or deposit voluntary on credit or for full settlement the monthly instalments and/or interests, which if the suspension was not applicable would be payable under the terms of the loan agreement.
The non-payment of the instalments during the suspension period does not constitute a breach of terms of the loan agreement.