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Steps should be taken to ensure that loan payments are not delayed

The European Banking Authority (EBA) has demanded that lenders be given proper leave to avoid defaulting on loan payments during the Covid crisis.

The EBA wants payments to be scheduled by the end of this month and to offer separate relief measures for each.

The EBA said in a statement that the imposition of a payment moratorium would be effective in meeting the short-term liquidity challenges posed by the global pandemic.

However, in the current scenario, EBA is not prepared to extend the relief process for borrowers further.

The EBA requires that loan payments be scheduled separately to ensure repayment.

Meanwhile, the Banking and Payment Federation of Ireland said half of the 86,000 mortgages due by the end of March were active by the end of August as money lenders extended the holiday.

Many have not taken advantage of the option of extending the relief period from three months to six. Instead, the Banking and Payments Federation said they were slowly returning to payments as they emerged from the financial crisis.

Banking executives and regulators believe that those who have taken payment leave will not be able to return to normal payments even if the relief period ends in the coming weeks.

Those who have not yet received payment exemptions can also apply for six months’ relief until the end of September.

At the same time, in the wake of the Covid crisis, banks had promised to extend the payment period for weak industrial lenders, but this has not materialized.

Lenders have the discretion to decide whether or not to lend leave or relaxation time to borrowers. But Central Bank Governor Gabriel McLeof said he thinks more relief measures should be taken than giving the payment a holiday.

The EBA has also issued special guidelines for new borrowers in the Covid context. The EBA also clarifies that loans that have been defaulted on payment after September should be treated separately according to common regulatory rules.

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