The Finance Latvia Association (hereafter—Association), in collaboration with its members, has developed a moratorium allowing bank clients who are experiencing temporary financial difficulties due to COVID-19 to defer their mortgage principal payments for up to 12 months, and their leasing and consumer loan principal payments for up to six months. The moratorium doesn’t apply to restricted products such as credit cards and overdraft. The moratorium was agreed with the Financial and Capital Market Commission, and today it was also reviewed by the Competition Council of Latvia after consultations with the European Commission. Thus our banks are united in giving increased support to their clients to help them solve short-term difficulties in making loan repayments. 

“As soon as the second half of March, members of the Association began implementing their own support programmes for their clients who were having difficulties fulfilling their obligations due to the consequences of COVID-19. As of now, loan breaks have been applied to more than 4,400 clients. To ensure that this process continues as effectively and uniformly as possible, the Finance Latvia Association and its members, complying with the best practices in providing support, confirmed a moratorium which meets guidelines set by European Bank institutions. Any credit institution or its subsidiaries can join the moratorium, and any participant in the Latvian loan market which issues mortgage loans, consumer loans or leasing services to private individuals can comply individually,”

 – emphasises Head of the Finance Latvia Association Sanita Bajāre.

Banks will inform the public on joining the moratorium on their websites. Banks will also submit information on joining to the Financial and Capital Market Commission, the Competition Council and the Association. The Association will receive information from the banks on the total number of people who have been issued a loan break. A financial institution may also join the moratorium partially, indicating which of their loan services the loan break will apply to in accordance with the amount and procedure set in the moratorium.

The moratorium states that a client will be able to defer principal payment of the base repayment sum of their loan if they have had no significant delays in fulfilling the obligations within the past 12 months before March 12, 2020, as long as they have not declared insolvency before the date specified or during  the loan break period, and provided the client continues to pay interest and/or other payments set in the loan agreement. The client must continue to act honestly, cooperate fully and openly with the financial institution, and provide accurate information.

There will be no commission fee for processing the application. Other contract amendments which would worsen the client’s situation will not be applied. The moratorium promotes a simple process for deferring principal payment sum of their loan. Clients will simply have to report the COVID-19 related reason for deferring loan principal payments, such as reduced income, cancelled work contracts, etc. Clients may choose a shorter loan break than that which is specified in the moratorium. Financial institutions which have joined the moratorium invite their clients to use this opportunity after carefully and objectively evaluating their financial abilities and suitability for the situation.

A defer of a base loan payment sum means that, for the time period in question, the client will only have to pay interest, repaying the base sum later within the loan payment deadline. Borrowers should bear in mind that their base payment is deferred, meaning that repayments will increase after the loan break. To ensure that monthly payments remain the same as before, clients may wish to extend their loan payment date, but in this case they should bear in mind that, in accordance with the situation in the financial markets, total interest paid may increase, and there may be an additional commission fee for extending the payment deadline.

Clients who are in financial difficulties and therefore cannot fulfill their loan obligations, but who do not meet the terms of the moratorium, must contact their bank to solve the situation individually.

The moratorium will come into force on April 29, 2020, and will apply until the Association announces that it has ended. A loan break can only be given once in accordance with the principles of the moratorium; clients must apply and banks must come to a decision by June 30th, 2020. If a client has already requested a loan break before now, they may do so once more as part of the moratorium.

The moratorium was prepared in accordance with European Bank guidelines. Similar moratoriums were also signed over these days in Lithuania and Estonia.

Swedbank, SEB banka, Luminor, Citadele, BlueOrange Bank, Signet Bank, Baltic International Bank, AS PrivatBank, Industra Bank, Reģionālā investīciju banka and Inbank have expressed their readiness to join the moratorium.

For more information please visit: 


More information:

Sabīne Spurķe

Communications Manager 

+371 20604166

Finance Latvia Association

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