16/03/2020

Given the situation created due to the spread of the infection caused by the COVID-19 virus, the Central Bank of the Republic of Kosovo has taken some adequate measures regarding in terms of normal functioning of the financial system.

The measures taken by the Government of the Republic of Kosovo to stop the spread of the infection caused by the COVID-19 virus are expected to affect the development of businesses activities, and consequently decrease in the level of incomes of businesses in country. The slowdown of businesses activities in the Republic of Kosovo may affect in their solvency.

Considering this, Guvernor Mehmeti has held meetings with other national institutions and also has called several CBK Executive Board meetings relating latest developments in country.

The Executive Board, on 15 March 2020, also met with the Board of the Kosovo Banking Association (KBA), whereby discussed about the measures that CBK and the banking sector should undertake to maintain the financial stability in country and normal functioning of the banking sector, as in normal execution of payments, cash supply throughout the territory of the country, and especially in cities that have been quarantined.

Based on this meeting, the CBK Executive Board has also issued specific recommendations to the CBK Board, which were immediately addressed by the CBK Board.

On 16 March 2020, the Board of the Central Bank of the Republic of Kosovo has held an extraordinary meeting as a result of the circumstances created in the country, and unanimously adopted the recommendation on special authorization of the Executive Board to take the necessary and timely actions in order to effectively implement measures set forth by the Government of the Republic of Kosovo, at the same time, it has also adopted the recommendation of the Executive Board for an additional budget to enable stable functioning of the CBK under such circumstances.

Based on the above mentioned decisions, the CBK, along with the KBA, have jointly decided suspend loan instalment payments for businesses and individuals, due to the situation created in country and the decrease of their level of incomes, starting from 16 March 2020 until 30 April 2020, and depending on the situation, this suspension may be reconsidered for a longer period. Suspensions of loan instalment payments will be reviewed on a case-by-case basis so that banking sector help their clients to overcome the current situation.

Borrowers who have encountered financial difficulties, as a result of the decrease in personal or business incomes, should contact their banks with a request to suspend loan instalment payments. In cases where banks approve these requests, loan-related penalty interest shall not apply during this period. During this period, no credit rating deterioration measures shall be applied to borrowers. In the event of suspension of loan instalment payments, the CBK has taken all necessary legal measures to prevent the loans from being rated, to require no additional provisions and not to be rated as non-performing loans in the Credit Registry.

The Central Bank of the Republic of Kosovo, as the exclusive institution responsible for the regulation, licensing and supervision of banks and other financial institutions, in support of the economy, businesses and citizens of the country, under the current circumstances due to the spread of the COVID-19 virus, has made the abovementioned decisions, which are of temporary nature and shall be reconsidered pursuant to the legislation in force and circumstances created in country, ensuring this way efficient and stabile functioning of the country's financial system.