Taking into account the situation created due to the spread of infection caused by the Covid-19 virus, the Central Bank of the Republic of Kosovo has taken adequate measures regarding the normal functioning of the financial system. Measures taken by the Government of the Republic of Kosovo in order to stop the spread of infection caused by the COVID-19 virus, are expected to affect the development of business activity and consequently to reduce and reduce the level of revenue for businesses in the country .
The slowdown in the activity of businesses in the Republic of Kosovo may also affect their solvency. Taking this into account, Governor Mehmeti has held meetings with other state institutions and has also invited several meetings of the CBK Executive Board regarding the latest developments in the country. Also, the Executive Board, on March 15, 2020 met the Board of the Kosovo Banking Association (KBA), with whom it discussed the measures that the CBK and the banking sector should take in order to maintain financial stability in the country and normal functioning of the banking sector, as in the normal execution of payments, cash supply throughout the country, especially in the cities, which are quarantined.
Based on this meeting, the Executive Board of the CBK has submitted specific recommendations to the Board of the CBK which are immediately addressed by the latter. On March 16, 2020, the Board of the Central Bank of the Republic of Kosovo, held an extraordinary meeting as a result of the circumstances created in the country and unanimously approved the recommendation for special authorization of the Executive Board to take the necessary and timely actions. in order to efficiently fulfill the measures set by the Government of the Republic of Kosovo and at the same time has approved the recommendation of the Executive Board for an additional budget to enable the stable functioning of the CBK in such circumstances.
Based on the above decisions, the CBK together with the KBA have jointly decided that for businesses and individuals who due to the situation in the country and the decline in the level of their revenues, to be allowed to suspend payments of loan installments, from March 16, 2020 to April 30, 2020 and depending on the situation, this suspension should be considered for even longer.
Suspensions of loan installment payments will be reviewed on a case-by-case basis in order for the banking sector to assist their customers in overcoming the situation. Borrowers who have encountered financial difficulties as a result of declining personal or business income should contact their banks with a request for a suspension of loan installment payments. In case of approval by the bank, the penalty interest related to the loans will not be applied in this period.
During this period, no credit deterioration measures will be applied to borrowers. In such circumstances, in the event of suspension of loan payments, the CBK has taken all necessary legal measures so that loans are not classified, no additional provisions are required and are not classified as non-performing loans in the Credit Registry.
The Central Bank of the Republic of Kosovo, as the sole institution responsible for licensing, supervision and regulation of financial institutions, in support of the economy, businesses and citizens of the country, in the conditions of the situation created in the country, due to the spread of the Covid virus 19, has taken the above-mentioned decisions which are temporary and will be reviewed based on the legislation in force and the circumstances created in the country, thus ensuring the efficient and stable functioning of the financial system in the country.