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Banco de Portugal implements EBA Guidelines on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis

The Board of Directors of Banco de Portugal has approved Circular Letter No CC/2020/00000022 implementing the Guidelines of the European Banking Authority (EBA) on legislative and non-legislative moratoria on loan repayments applied in the light of the COVID-19 crisis (EBA/GL/2020/02).

These Guidelines establish the terms and conditions that the extension of payment terms inherent in credit obligations, associated with public and private moratoria created in the context of the COVID-19 pandemic, should fulfil in order not to trigger classification as default of the obligor, nor the definition of forbearance measure, in accordance with Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 (the ‘CRR’) and the EBA Guidelines on the application of the definition of default under Article 178 of Regulation (EU) No 575/2013.  

These Guidelines also establish the documentation that institutions should keep on the moratoria, as well as the information that institutions are expected to share with their competent authorities and that these should report to the EBA.

Due to the urgency of the matter and the specific focus of these guidelines on COVID-19 pandemic-related measures, the EBA decided not to carry out public consultations or a cost-benefit analysis in this case.

Circular Letter No CC/2020/00000022 is addressed to the credit institutions and entities listed in Article 1 of Notice of Banco de Portugal No 11/2014 of 22 December 2014.