National Commission of Banks and Insurance provides relief measures in Honduras
On March 21st of this year, the National Commission of Banks and Insurance (CNBS), the government body that regulates and supervises public and private banking and financial activities in Honduras, issued CNBS circular N° 006/2020. This document establishes a series of temporary relief measures to address the economic impact that users of the system will suffer, caused by the measures adopted by the government (the most important of which is the curfew that has forced the closure of businesses throughout the country in a high percentage) under the pandemic caused by COVID-19.
The main measure of the ruling is that the institutions supervised by the CNBS may grant periods of grace to debtors, both individuals and legal entities, who are affected in their finances by the reduction of their cash flows in this time of crisis. The conglomerate to which the relief measure refers, among others, consists of both companies that are currently debtors by virtue of loans and that pay their debts on a monthly basis, as well as individuals in the same situation whose income or wages are reduced or suspended. These legal and natural persons must in turn be included within the sectors that the CNBS establishes as affected and which are engaged in the provision of services, tourism and transport-related activities, including hotels, motels and similar, land, air and sea transport, the agricultural sector, maquila and micro and small enterprises. Lastly, it considers that other economic sectors which, because of their commercial activity may be affected by the current crisis, may also be considered to be affected.
It is necessary to establish that users who intend to enjoy this benefit may request it from the corresponding banking or financial institution and must be able to prove their precarious situation or economic insolvency generated by the crisis. Financial institutions will be free to analyze each case and determine whether or not the benefit is applicable, but will be permanently supervised by the CNBS Superintendence.
Grace periods granted may not exceed June 30th, 2020. At the end of this period, debtors may refinance or readjust their loans on favorable terms for them.
Finally, the supervised institutions are prohibited from applying late charges or interest associated with the relief measures contained in CNBS circular N° 006/2020.
Mauricio Zarruk Hasbun
Senior Associate
García & Bodán
Honduras