Signet Bank implements moratorium developed by the Finance Latvia Association

Signet Bank has joined the Finance Latvia Association moratorium on housing mortgage principal payments for up to 12 months, and up to 6 months for loan principal payments, available to clients having short-term financial difficulties due to COVID-19.

At a time when the world is faced with great uncertainty, and the virus has not spared any country, we believe that supporting our clients who are dealing with hardship is a logical next step, and we support the moratorium developed by the Finance Latvia Association. Signet Bank’s guiding principle is permanently transparent partnerships with our clients, so if a client is having difficulties, we are willing to defer their mortgage principal payments for up to twelve months and their consumer loan principal payments for up to six months.

Roberts Idelsons, CEO at Signet Bank

In the second half of March, association members introduced a variety of support programmes for their clients whose obligations were burdened by the consequences of COVID-19. To implement this process in an effective and consistent manner, the Finance Latvia Association and its individual members have approved a moratorium according to the European Banking Authority guidelines, following best practices in financial relief.

Finance Latvia Association chair Sanita Bajāre

The moratorium specifies that a client is eligible for deferral of principal payment obligations if they had no substantial delays in the fulfilment of obligations within the 12 months preceding 12 March 2020, and were not declared insolvent prior the aforementioned date, or during the period of principal payment deferral, and provided further that the client continues paying loan interest and/or other applicable fees under loan agreement throughout this period. A client must consistently act in good faith, cooperating with the bank and committing to transparency.

No fee will be collected for reviewing a client’s application. No other contractual amendments that would worsen conditions for the client will be made. The moratorium ensures a simple process of principal debt payment deferral for any client. A client must notify the bank about the reason for deferring obligations due to COVID-19, such as reduced income, terminated labour relationship etc. Likewise, a client of the bank may select a shorter period of deferral of obligations than provided for in the moratorium.

Deferral of principal obligations means that, during the relevant period of time, a client shall only be liable to pay loan interest, resuming principal payments at a later date during the current period of the loan.

Clients that do not meet the moratorium criteria – but have encountered financial difficulties that preclude them from performing obligations – may still apply for deferral of obligations with the bank, although in such cases a situation will be resolved on a case-by-case basis.

The moratorium takes effect on 28 April 2020 and remains in force until the Finance Latvia Association announces its termination.