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CBJ extends loan moratorium period for COVID-affected sectors

By JT - Nov 22,2020 - Last updated at Nov 22,2020

AMMAN — The Central Bank of Jordan (CBJ) on Sunday announced that the loan moratorium period for the sectors most-affected by the COVID-19 pandemic is extended until the end of June, 2021.

As part of its endeavours to alleviate the negative economic impact of COVID-19, notably to give affected individuals and companies enough time to repay their dues to the banks, the CBJ on Sunday decided to extend the validity of the circular issued on March 15, 2020, related to loan moratorium until June 30, 2021.

According to the decision, banks have to postpone the repayment of instalments by the companies affected by the pandemic.

The decision also stipulated that banks are not allowed to charge commission or impose a late payment interest on these companies, the Jordan News Agency, Petra, reported.

According to the CBJ, “COVID-19-affected people” include all individuals who have lost their income and those whose salaries have been cut, as well as all individuals whose pay raises and/or allowances are being deferred.

The CBJ urged all clients impacted by the coronavirus crisis to visit their banks to provide proof that their income has been affected by the pandemic, and set the appropriate repayment mechanism. 

It also called on the banks to show “the utmost level of flexibility amid these exceptional conditions" and to take all necessary measures to mitigate the economic impact of the pandemic on the affected individuals and sectors.

The new decision was made after the banks postponed repayments of individuals’ loan instalments since the beginning of the COVID-19 pandemic at a total value of JD800 million, while the amount of the companies’ structured credit facilities surpassed JD3 billion.

The CBJ, on November 4, 2020, issued a circular to banks, extending the grace period until the end of 2021 under the CBJ’s JD500-million small- and medium-sized enterprises (SMEs) support programme. The grace period is the time span after which the borrower should begin to repay loan instalments.

Banks are still receiving loan applications under the SMEs programme. 

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