COVID-19 Regulations: Frequently asked questions about notarial and registry services
29/04/2020COVID-19 Regulations: Measures taken by the Superintendence of the Stock Market
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The Superintendency of Banks of Panama issued Agreements No. 002-2020 of March 16, 2020 and No. 003-2020 of March 26, 2020, with the purpose of temporarily adapting the regulatory requirements on credit risk, contemplated in Agreement No. 04-2013 of this same Superintendency, to the current threat situation of the spread of the Coronavirus.
What measures has the Superintendency of Banks of Panama taken?
The Superintendency of Banks of Panama implemented a new type of credit called “modified credits” as an exceptional and temporary measure, based on financial viability criteria and taking into account the debtor’s repayment capacity, and will be subject to special monitoring by the regulator.
Additionally, a special and temporary measure was established that banking entities may use up to 80% of the dynamic provision for the creation of specific provisions, and they may only make dividend payments once they have restored the amount of the dynamic provision corresponding to the entity.
What is the purpose of these exceptional and temporary measures?
These exceptional and temporary measures are intended to protect the financial stability of the Panamanian banking system by relaxing the credit risk requirements applicable to banking entities, as they deem necessary and taking into account the different circumstances of each loan.
To which credits do the established measures apply?
These special measures apply to both consumer and corporate loans, and modifications to these may be made at the request of the debtor or at the initiative of the banking institution.
What are the rules applicable to modified credits or loans?
- Loans classified as normal and special mention, as well as restructured loans that are not in arrears, may be modified.
- Modified credits must be clearly identified as such by banking entities.
- Banking institutions should try to take into consideration the current situation facing the country.
- The modification of credits will be exempt from charges and commissions by the banking entity, with the exception of legal, notary and registry fees paid to third parties.
- Modification of credits will be exempt from the requirement to update the appraisal.
When is a credit considered modified according to the special and temporary measures established?
Credits that are modified in accordance with the special and temporary measures established by Agreement No. 002-2020 issued by the Superintendency of Banks of Panama, will be considered modified on the date on which the debtor has accepted the modifications by any means or modality, including electronic means, tacit acceptance and presumed acceptance by silence.
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