· With the goal of continuing to assist financial system customers in dealing with cash flow difficulties, the Banking Supervision Department announces the expansion of this framework, which will apply to the target population[1] that was markedly adversely impacted by the crisis, in the following manner:
Customers whose consumer loan is currently in a status of deferral in accordance with the previous framework, and that meet the terms of the current framework—the deferral will be carried out over a period of up to 6 months, cumulative, without the company’s judgment. The deferral without the company’s judgment is of the principal component of the loan. The credit card company may also allow the deferral of the interest in addition to the principal.
Customers who did not defer their consumer loans and meet the terms of the current framework—the deferral will be carried out for a period of up to 3 months without the company’s judgment. In addition, there is an option, in accordance with the company’s judgment, for an additional deferral of 3 months for such loans (up to a cumulative 6 months).
The deferral without the bank’s judgment is on the principal component in the loan. A credit card company may allow the deferral of the interest in addition to the principal.
· The period for submitting a request to defer loan repayments in accordance with this framework will be between January 1, 2021 and March 31, 2021. The date of the additional framework going into effect will be beginning from January 1, 2021.
· This framework presents the minimum terms for deferring loan repayments, and every credit card company may expand it for the benefit of their customers and at their request.
The Supervisor of Banks, Yair Avidan, said, “Extending the framework of credit card companies is intended to enable customers who are still enduring a significant negative impact from the crisis, an additional cash flow leniency for a specific period of time during which they are to prepare to return to regular loan repayment. It should be remembered that deferring payments involves a cost and therefore the customers are required to closely examine the ramifications of the deferral before making a decision. I commend the credit card companies on the extension of the existing framework, which joins the additional processes taken since the beginning of the crisis in order to assist their customers during this time.”
Framework for loan payments by the credit card companies
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Customers whose loans are in a status of deferral in line with the framework |
Customers who did not defer their loans during the crisis |
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Target population |
· Consumer credit up to NIS 100,000* · Customers whose net household income does not exceed NIS 20,000, as of February 28, 2020. · Adverse impact on income of 40% or more. The manner of checking the adverse impact on income: At the company’s judgment. |
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Period of deferral |
Up to 6 months cumulative (including previous deferral months)—without the company’s judgment |
First 3 months without company’s judgment + additional 3 months in accordance with the company’s judgment |
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Interest rate |
The interest rate in the agreement |
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Manner of making the accumulated payment after the period of reduction |
Adding payments at the end of the loan period** |
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Fees |
No fees |
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Clarifications:
*Does not include loans in commercial collaboration with a third party.
**Subject to the company’s automation abilities deriving from the company’s computer system. If needed, alternative solutions will be proposed.
[1] Cumulative conditions: Customers whose loans of up to NIS 100,000 are in a deferral status as of the start date of the additional framework; that as of February 28, 2020 have net household income that does not exceed NIS 20,000; and for whom there is an adverse impact on their income of 40 percent or more.