MINSK, 26 March (BelTA) – The measures the central bank is taking will help support enterprises and the population in the current situation, BelTA learned from Yelena Mashnina, Head of the Central Office for Banking Oversight of the National Bank of the Republic of Belarus (NBRB). The official commented on the countercyclical measures taken by the central bank recently in order to allow commercial banks to more effectively support the real sector of the economy.
In her words, Belarusian companies, primarily exporters, have run into certain problems in the current conditions. The problems arise from various restrictions imposed by many countries due to the coronavirus pandemic.
“The countercyclical measures recently taken by the National Bank are designed to support enterprises, including exporters. We understand that the difficulties our enterprises are experiencing are temporary. Nevertheless, it is quite important to promptly respond to this situation in order to support our enterprises that enjoy financial support of banks,” Yelena Mashnina said.
She reminded that the share of state-owned assets and bank capital in Belarus' banking industry stands at 60% at present. “Taking into account such an important fact in the course of working out countercyclical measures, the Board of the National Bank definitely evaluated consequences to the stability of the banking sector. With this in mind decisions were made to tweak the safe operation standards that the banks had to observe earlier,” she explained.
Thus, all the measures taken by the National Bank of the Republic of Belarus are temporary and are prompted by external factors. They will stay in effect till 31 December 2020. “These measures will have a substantial effect on the performance of enterprises. In the National Bank's opinion, they should become an important part of the set of measures designed to support the real sector of the economy,” Yelena Mashnina stressed.
The central bank has also taken measures to support citizens, who take out loans in banks. In particular, banks have been allowed to amend loan contracts with natural persons taking into account their real earnings and the ability to honor their commitments. “It means banks will be able to adjust loan payment schedules taking into account real earnings of individuals and will be able to amend the loan contracts if and when citizens ask them to,” Yelena Mashnina explained. Respectively natural persons will be able to dodge penalties if terms of their loan contracts are promptly adjusted.
“All the measures taken by the National Bank match the current situation, are designed with rather a short term of response to the situation in mind, and are meant to support the real sector of the economy, protect interests of Belarusian citizens and undoubtedly ensure the financial stability of the banking industry,” the official concluded.
On 18 March the National Bank of the Republic of Belarus took a number of countercyclical measures to enhance the ability of commercial banks to keep providing financial support to the real sector of the economy. The decision was made against the backdrop of negative external factors.
In particular, certain prudential requirements were tweaked till 31 December 2020. While classifying assets susceptible to credit risks and while forming special reserves, banks can ignore the criterion of sufficient receipts in foreign currency of the debtor.
Supervisory boards of commercial banks were sent recommendations on priority transfer of last year's profits and undistributed profits of past years to the reserve fund and the authorized fund. The central bank also recommended that banks should not pay out dividends to shareholders in 2020.
On 26 March the National Bank mentioned additional measures designed to enhance the ability of commercial banks to support the real sector. The banks are allowed to keep the size of their conservation capital buffer to 2.25 percentage points till 31 December 2020. Some measures can be used in the course of classifying assets susceptible to credit risks and in the course of forming special reserves.
The National Bank of the Republic of Belarus also encouraged commercial banks to consider the possibility of loan repayment holidays for natural persons. The banks were also encouraged to postpone loan due dates.