Immediately following the devastating floods and landslides in August 2023, the government responded by preparing measures to address the consequences of the damage. Among the measures taken is the temporary deferral of bank loans. To ensure that users are well-informed about this measure, additional explanations have been provided.
What Is It About?
This is a temporary measure in the field of bank loans for legal entities and individuals who, as borrowers, are facing liquidity problems due to the consequences of the August 2023 floods and landslides.
The measure obliges banks and savings banks, including their branches based in Slovenia, to grant a deferral of payment obligations from a credit agreement for a period of 12 months to borrowers who have suffered damage due to the consequences of floods or landslides in the amount of at least 10,000.00 EUR for private individuals or 100,000.00 EUR for legal entities, provided that the individual obligation from the credit agreement for which the borrower requests a deferral of payment has not fallen due for payment by July 31, 2023.
The bank and the borrower may agree upon a shorter or longer deferral period if it is more favorable for the borrower. They may also agree on different characteristics of the payment deferral.
Who Is the Measure Intended For?
The measure is intended for bank borrowers who suffered damage in the August 2023 floods, including:
- Companies with registered offices in Slovenia that suffered damage of at least EUR 100,000.
- Cooperative societies, associations, institutions, individuals employing workers, or self-employed individuals with their registered office or permanent residence in Slovenia that suffered damage of at least EUR 10,000.
- Agricultural holdings or holders of supplementary farm activities that suffered damage of at least EUR 10,000.
- Private individuals with Slovenian citizenship and permanent residence in Slovenia that suffered damage of at least EUR 10,000.
What Does Payment Deferral Mean?
Payment deferral of obligations from a credit agreement means a suspension of the maturity of all obligations under the credit agreement until the end of the deferral period. After the end of the payment deferral period, the first deferred installment becomes due for payment 12 months later than originally agreed in the original credit agreement, meaning that the payment of each individual obligation is postponed by 12 months.
During the deferral period, interest on the deferred portion of the principal of bank loans may be calculated at a maximum of 12-month EURIBOR + 0% or at the regular interest rate agreed upon in the credit agreement if it is more favorable for the borrower. Interest is calculated but is paid at the end of the deferral period in the manner determined by the bank.
Eligible parties must submit their loan deferral applications to the bank no later than December 31, 2023, with the bank not allowed to charge fees for the deferral or impose other conditions not covered by the ZIUOPZP.
Damage, Documentation, Banks
The documentation required by the bank includes, among other things, official documents from the tax authority regarding tax deductions for employment income for the past five years, as well as a certificate of settled tax obligations issued by the tax authority.
Damage due to the consequences of floods or landslides is not limited to direct damage but may also include indirect damage, such as the interruption of the supply chain.
The measures for bank and non-bank loans are not mutually exclusive, meaning that an individual can apply for a consumer loan deferral from a non-bank lender and a bank or savings bank loan deferral simultaneously. The bank is not obligated to subsequently defer already paid obligations; the deferral only applies to unpaid obligations.