Credit holidays in Russia due to coronavirus

2024 Author: James Gerald | [email protected]. Last modified: 2023-12-17 14:00

On Wednesday, March 25, Russian President V. V. Putin made an address to the nation, in which he announced the introduction of a week-long vacation in the country due to the coronavirus. The latest news for today is devoted to the measures taken by the Government to alleviate the economic consequences of the pandemic: additional payments, deferred credit and tax payments.

What the President spoke about in his address to the Russians

A coronavirus epidemic is flaring up in the world, which will inevitably affect the Russian economy. Against the background of relative prosperity in the regions, an alarming dynamics of infections is observed in Moscow. Therefore, the head of state proposed to introduce a week-long break for all types of business activities, excluding structures, organizations and enterprises that are responsible for meeting the needs of the population's life support system.

The main priority of the Government in Russia is concern for the health and well-being of citizens. Therefore, during a difficult epidemiological situation, a number of measures are being taken to ensure safety and prevent the spread of infection and to support citizens in a difficult period.

These measures include:

• voting on amendments to the Constitution of the Russian Federation is postponed until the onset of stabilization and the end of the epidemic (the exact date has not been named);
• holidays due to coronavirus, from March 20 to April 6, will run with the same salary (only shops, medical facilities, transport and banks are open);
• deferrals of tax payments for six months (excluding VAT) and insurance premiums (for micro-enterprises) are introduced;
• credit holidays are due for mortgage and consumer loans to anyone whose monthly income has dropped by a third or more.

In Russia, the payment of social benefits is automatically extended, the order of accruals for sick leave is changed (until the end of the current year), and amounts are paid ahead of schedule to the Victory Day to veterans. Maternity capital will be accrued in June, and until that time, monthly payments will be made to everyone who is entitled to it.

What is known about the deferred loan payments

A prerequisite for concluding a loan agreement is timely debt repayment and interest payments. Due to the coronavirus, many sectors of the economy have experienced a downturn in business activity, and there is no demand for goods and services.

Some citizens working in troubled industries due to the global pandemic have significantly decreased their monthly income. For those for whom it fell by 30 percent or more, the opportunity is introduced:

1. Receiving a credit vacation, both for consumer loans and mortgages.
2. During the coronavirus pandemic, tax payments will be deferred for small and medium-sized businesses, and bankruptcy procedures will be simplified for individuals.
3. Micro-enterprises will also be able to get a deferral of insurance premiums. Their size will decrease for companies that pay 30% of the salary of employees, this provision will be prolonged for some time.
4. The issue of extending credit vacations to individual entrepreneurs and citizens registered as self-employed is under consideration.
5. A moratorium on credit collection is introduced for six months (the filing of applications of creditors for fines and bankruptcies is canceled), but this measure only applies to industries where activities have become problematic or impossible during the spread of coronavirus in the world and in Russia.

All these measures to protect citizens can be supplemented by credit holidays due to coronavirus infection for business, while this remains under consideration by banks. The President urged them to provide such an opportunity, and the Central Bank of Russia - to give state guarantees for this. For citizens of the Russian Federation, debt service will be carried out by banks free of charge and without charging fines.

What is already known about loan deferrals

In the explanations of the Central Bank, it is indicated that any person whose income per month has decreased by a third can be attributed to the category of persons who can apply for a credit vacation. The deferral is provided without penalties, after the expiration of the term, the person will continue to repay the loan as usual.

So far, there is no information about the package of documents that will need to be submitted, or about the time frame in which all this can be drawn up.

Sberbank announced similar measures in relation to corporate clients from problematic sectors during the epidemic. These include tourism (hotels, services, transport), trade (wholesale and retail in certain categories of goods, retail real estate), as well as the sphere of culture, sports, education, production of building materials.

German Gref admitted the possibility of postponing the deferral until the expiration of the loan agreement. True, this applies only to those who were especially badly affected during the pandemic.

Andrey Kostin (head of VTB) gave a more streamlined answer to the president's proposal. He noted that it is difficult to calculate the percentage of income and its reduction, but the bank intends to determine the algorithms and calculation methods as soon as possible and work with private clients, small and medium-sized businesses.

Summarize

In his address to the citizens of Russia, the President announced measures to help the state to mitigate the consequences of the epidemic:

1. Benefits are accrued without renewal, automatically.
2. Deferred loan payments are provided.
3. Additional benefits are paid to families with children.
4. Business structures will receive tax and credit deferrals.