Russian Central Bank recommends banks, MFO grant loan holidays to mobilized reservists

MOSCOW. Sept 21 (Interfax) - The Central Bank of Russia (CBR) has recommended that banks and microfinance organizations (MFO) grant loan holidays to mobilized reservists, and the recommendation could be enshrined in law going forward, the CBR said in a statement.

Reservists mobilized as per the Russian presidential decree can request that their respective banks or MFO defer loan repayments or reduce the amount for all types of loans, including mortgages and other loans for the period of mobilization.

The regulator recommends that banks, MFO and other professional lenders meet the needs of these borrowers, and develop special loan holiday and restructuring programs, or adapt existing ones. The CBR also recommends not accruing interest in arrears (fines and penalties) on contracts; not requiring early performance of obligations; suspending collection of overdue debt or mortgages; and not evicting from mortgaged housing previously foreclosed.

A similar right is granted to the direct relatives of said borrowers if they are dependents.

Meantime, banks, MFO and credit history bureaus should not consider the restructurings as reflecting poorly on a borrower's credit history.