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Kenyan bank borrowers have three months (March 3 to June 3) to regularise their loan repayments following the expiry of a one-year window through which the lenders had extended and restructured the loan repayments for customers adversely impacted by Covid-19 pandemic.
Central Bank, in consultation with the banks, agreed on a one-year period (March 3, 2020 to March 3, 2021) to extend emergency measures to cushion borrowers from the adverse economic effects of the coronavirus.
These measures included restructuring loans that were performing as at March 2, 2020 and the provision of regulatory flexibility to banks by the banking regulator.
"The one-year period for the emergency measures on extension and restructuring of loans ended on March 2, 2021, following which the standard procedures for loan classification and provisioning would apply," CBK said in a statement Tuesday.
"Specifically banks will from March 3, 2021, assess the performance of all restructured loans that were performing before March 2, 2020.The period for determining the performance of all the restructured loans will begin on March 3, 2021."
According to CBK the loans to be reassessed include restructured loans that were performing as at March 2, 2020 but went into arrears after that date.
"Consequently, in accordance with standard procedures, borrowers whose loans were performing before March 2, 2020 but were restructured and subsequently went into arrears, will have three months up to June 3, 2021 to regularise their loans," said CBK.
CBK assesses that the emergency measures were highly effective and that borrowers were provided with various restructuring options including extension of repayment period, moratorium on principal or interest and waivers on interest or fees.
"The measures have provided space to borrowers to ride through the pandemic, mitigate job losses and pivot their businesses models to the new normal. For banks, the measures provided time to build additional capital and liquidity buffers to take them through the pandemic period and beyond," said CBK... Read more on All Africa
Source: All Africa