TECHNICAL STANDARDS TO FACE NON-COMPLIANCE AND CONTRACTUAL OBLIGATIONS DUE TO THE COVID-19 PANDEMIC- ISSUED BY THE CENTRAL RESERVE BANK OF EL SALVADOR.

TECHNICAL STANDARDS TO FACE NON-COMPLIANCE AND CONTRACTUAL OBLIGATIONS DUE TO THE COVID-19 PANDEMIC- ISSUED BY THE CENTRAL RESERVE BANK OF EL SALVADOR.

These rules are intended to encourage the search for support mechanisms for the credit situation of debtors who may have payment difficulties on their loans or for subjects contractually obligated to financial entities to which these Rules apply, as a consequence of the crisis. economic derived from the effects of COVID-19, which was declared a pandemic by the World Health Organization.

The subjects obliged to comply with these Standards are: Banks incorporated in El Salvador, their offices abroad and their subsidiaries;

1. a) The branches and offices of foreign banks established in the country, as pertinent;
2. b) Insurance companies, their branches abroad;
3. c) Branches of foreign insurance companies established in the country, as pertinent;
4. d) Cooperative associations that provide insurance services;
5. e) Cooperative banks, savings and credit societies and federations regulated by the Law of Cooperative Banks and Savings and Credit Societies;
6. f) Banco Hipotecario de El Salvador, SA;
7. g) The Social Fund for Housing, the National Fund for Popular Housing and the Solidarity Fund for the Microenterprise Family, insofar as it does not contradict their creation laws or the provisions of the Court of Accounts;
8. h) The Agricultural Development Bank, insofar as it does not contradict its law of creation or the provisions of the Court of Accounts;
9. i) The Development Bank of El Salvador, insofar as it does not contradict its founding law or the provisions of the Court of Accounts;
10. j) Mutual guarantee companies and their local reinsurance companies;
11. k) The Institute of Social Security of the Armed Forces; and
12. l) Credit card issuers.

The above entities will implement procedures through which they can modify the conditions of the credits agreed with the debtors, new conditions for the payment of obligations, review the terms and conditions of the loans, in terms of interest rates and terms, which will allow you to agree and grant grace periods while maintaining the risk category, among others, as long as the extraordinary policies established by each entity are complied with.

Likewise, entities must adopt the necessary mechanisms to maintain the validity of the different insurance policies that cover the credit obligations of people affected by the COVID-19 pandemic.

People who are unable to comply with their credit obligations as a result of the COVID-19 pandemic will maintain the risk category they present at the time of applying the measure established in the entity's policy, however, they do not comply with the payment conditions. previously agreed. Likewise, the counting of days in arrears will be suspended.

The entities that apply these Standards must have a separate and updated record of the debtors and credit operations that have been subject to the benefits of these Standards and keep them at the disposal of the Superintendency.

TEMPORARY MEASURES FOR THE TREATMENT OF INSURANCE POLICIES

In accordance with the provisions of article 9 of Decree 593 State of National Emergency of the COVID-19 Pandemic, insurers must guarantee that people obliged to pay the premiums corresponding to the insurance they offer and who are affected by the situations generated by COVID-19, do not incur breaches of contractual obligations and commercial penalties of any kind may not be imposed on them.

OTHER GENERAL PROVISIONS OF THESE POLICIES

The effects of these Rules will be maintained for one hundred and eighty days from the date of validity of these Rules, which come into force as of March 19, 2020.

Aspects not provided for in terms of regulation in these Standards will be resolved by the Central Bank through its Standards Committee.-

For more information and legal assistance in this matter, please do not hesitate to contact us through the following channels fmartinez@romeropineda.com; Info@romeropineda.com; cvillafuerte@romeropineda.com tel. 2505555 or for emergencies 7729-9977

It will be a pleasure for us to serve you.