Package of measures for banks

The first decision is to limit private banks from investing abroad by increasing the demand for capital.

For all new funds that the banks will invest abroad, they will be obliged to add more capital, which makes this investment not lucrative for them.

In parallel to this, the Central Bank has removed the risk coefficient for loans that private banks will give in the next two years. The loans are classified as investments with a maximal risk coefficient of 100%.

But for the two next years, the coefficient will be zero, meaning that banks can give loans without increasing their capital.

The second measure is that of encouraging the restructuring of loans in the early phases, when creditors give the first signals of incapability to pay.

So far, if a bank would accept to extent the period of a loan for a borrower in difficulties, the bank was obliged to raise as reserve fund 20 to 100% of the total loan.

With the second package, for two loans, which are the standard loans and the following ones, where the first signals of problems appear, the obligation to save reserve funds will go down to 10%.

The last measure, through which the central bank will revive the loan, is the one that makes the liquidity requests easier at 15% for foreign currencies and 20% for ALL.

This package comes in a time when loans are stalling for more than one year. Through these measures, the central bank aims to reduce the cost of a loan for private bank and increase the costs for alternative investments, such as transferring funds abroad.

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