Russia's Central Bank Urges Debt Restructuring or Payment Deferrals for Flood-Hit Small and Medium-Sized Businesses
Russia's Central Bank Offers Loan Relief to Flood-Hit Businesses
Companies affected by severe flooding have until December 31 to apply to their lenders for loan payment deferrals. A state of emergency due to flooding was declared in Chechnya and Dagestan in early April.
The Bank of Russia has recommended that banks and non-bank financial institutions restructure the debts of small and medium-sized businesses impacted by the floods, according to a statement on the regulator's website.
Until the end of the year, affected businesses may request deferrals on loan and credit agreements from their lenders.
"If there are no legal grounds to grant a grace period, the regulator advises banks and financial institutions to review applications for contract modifications and provide deferrals under their own restructuring programs," the statement reads.
The Central Bank also reminded lenders that no penalties or late fees should accrue during the deferral period and that restructuring should not negatively affect the companies' credit histories.
Eligibility for deferrals applies to businesses registered in regions where a state of emergency has been declared due to flooding, as outlined in the Bank of Russia's guidance. This year, severe flooding has struck Dagestan and Chechnya, where federal emergency measures were introduced.
