Albania's Bank approves measures to delay loan installments by 31 August 2020

In March and April of this year, within the state of burden for the country, the Albanian economy, and in particular for the banking system and other financial institutions, as a result of the pandemic situation COVID -19, the Bank of Albania undertook several measures and regulatory changes for banks, but not only, with the aim of mainly resolving clients' demands for temporary periods of postponement, and also ensuring the health of banks and the system as a whole.

In terms where difficulties still continue to be identified for creditors and banks, as a result of this situation, as well as with the aim of resolving concerns raised by business and by the Albanian Bank Association, the supervisory authority, analyzing and considering proposals and requirements put forward by banks, and based on other countries' best experiences and guidelines of the European Supervisor (EBA) to this end, approved some changes in the credit risk management rules aimed at relief for banks, mainly through:

) The temporary implementation of obligations stemming from loan risk management requirements, credit rating and procurement for all clients' categories, even for another period from June 1st until August 31, 2020, due to financial hardship and decline in borrowers' payment capacity, influenced by the situation.

) The temporary suspension of reserve funds for real estate obtained against repayment of loans by December 2020.

) A facilitator for restructuring loans, under which banks are given the opportunity to restructure current loan relations with the aim of finding practical solutions M EDIALs depending on the payment capacity of creditors by December 31st 2020, without additional costs of procedures and without worsening borrower status.

The 1 year extension of entry into force of tighter requirements for the classification and provigjiment of restructured loans for January 2022. By this measure banks will also be able to use the same criteria for classification and provimination of loans restructured as those before the pandemic situation; and the 1 year extension of regulation effects “for extra-trial treatment by banks, troubled financial creditors” until January 2022. In this way, banks will have a greater space of time to find a comprehensive solution M EDIALs for common borrowers in financial hardship.

Meanwhile, creditors whose payment capacity is not affected or damaged by this situation should normally continue to settle their obligations with banks.

In conclusion, the Bank of Albania and the Albanian Bank Association of Banks want to assure the entire Albanian public that they remain fully committed to providing all necessary support, in overcoming this difficult situation.