Bank Credits: Collection of Penalties Prohibited

In El Salvador, banks will not be able to charge any kind of penalty to clients who, due to the crisis of the covid-19, fail to pay their credit quotas.

Tuesday, March 24, 2020

They were approved "Temporary Technical Norms to Face Noncompliance’s and Contractual Obligations" derived from the emergency were approved, which will avoid that, during the validity of the emergency, the credit risk category of Salvadorans is affected, therefore, no penalty will be charged for non payment. With these rules will also allow the granting of credits, consolidation, restructuring and refinancing of debts in favorable conditions for those affected by the COVID-19 pandemic, reported the Central Reserve Bank (BCR).

See "Covid-19: Forecast for Financial Activity"

The official statement adds that "... People will be able to approach financial institutions to find solutions to facilitate the payment of their debts. The temporary rules allow support for natural and legal persons with difficulties in paying insurance premiums, derived from the pandemic, so that insurance coverage is not lost."

The BCR said that the temporary rules will be in force for 180 days from March 19, 2020.

Coronavirus: How are the outlook for businesses in El Salvador changing?

We prepared for our clients the report "Information System: Covid-19 and Business Outlook" which helps companies to measure the impact that the crisis will have on their activity in the coming months.

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In the third debate, the National Assembly approved a bill that grants debtors a 90-day extension of time for payment of credits granted by banking, cooperative and financial institutions.

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Costa Rica: $500 Million to Address Covid-19 Crisis

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