English

It’s not interest on interest, it’s a new loan

Bratislav Pejaković (Foto: Portal Analitika)

Secretary General of the Association of Banks, Mr Bratislav Pejaković, says that banks do not charge interest on interest through the moratorium.

“Moratorium, as reaction to the impact of pandemic, is seen as the first phase and opportunity for clients to relax for the period of 90 days. The second phase is when client should pay the interest calculated during the period of moratorium and continue with the regular repayment of the loan”, Mr Pejaković said.

The interest on interest is not linked to the penalty interest.

“After the moratorium expires, the client reports for the restructuring of the loan and a new calculation is made. It’s a new credit relation where Central Bank will be able to treat every loan documented as direct reduction of revenues as new placement”, Mr Pejaković explains.

He reminds that moratorium is client’s right not obligation.

“There’s no extra profit, because interest is profit”, Mr Pejaković says.

He says that Central Bank’s decision on temporary ban on the payment of dividends won’t produce any negative effects.

He thinks Central Bank acted in accordance with Government’s measures and showed great responsibility.

Central Bank has enabled banks to overcome this period more easily with a set of measures, he stresses.

 

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