The Bulgarian National Bank verified the “payment holiday” rules proposed by the Association of the banks

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On 11th December 2020 the Governing Council of the Bulgarian National Bank verified the Order for Deferral and Settlement of Accounts Payable to Banks and Their Subsidiaries – Financial Institutions with Regard to the State of Emergency Adopted by the National Assembly on 13th March 2020 (Order for Deferral), presented by the Association of the Banks in Bulgaria with new deadline – 31st March 2021.
The Order lays down the same three standard mechanisms (deferral of principal amount and interest for up to 9 months, deferral of principal amount for up to 9 months and mechanism, applicable to revolving products) for deferral. The main changes are:
• the bank clients can submit their deferral application until 23rd March 2021. Applications may be submitted by clients who have already benefit from the previous payment holiday,

• the banks may approve client’s applications until 31st of March 2021,

• the deadline for deferral of the client’s obligations is 31st December 2021. The total period of the deferral cannot exceed 9 months.

• Deferred payments must have been regularly serviced or with a default of no more than 90 days by the day of the submission of the application, unlike the previous requirement – by the beginning of the COVID-19 crisis in March 2020,

• a deferral of already deferred debt in the previous period of the payment holiday is admissible for not more than 9 months in total – in case a bank’s client have already taken advantage of the deferral by 30th September 2020 for a period of 6 months, they may apply for a second extension of another 3 months.
Although the Order provides general standard deferral schemes the banks may negotiate with their clients other individual deferral schemes which do not contradict with the laws applicable in Bulgaria.

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