Vacations float away from business – Newspaper Kommersant No. 172 (7373) of 09/19/2022

Business representatives sent a letter to the government with a request to expedite the development of criteria for companies that can claim compensation for interest undercharged by banks as part of a loan holiday. If these criteria are not adopted before the beginning of October, then the obligation to pay interest will fall on the borrowers.

The Association of E-commerce Companies (AKIT) sent a letter to the government with a request to quickly determine the criteria for determining the reimbursement of banks for lost profits from providing credit holidays to companies. The government told Kommersant that the letter from AKIT had been received and “will be considered in the prescribed manner.”

As noted in the association’s letter, one of the business support measures was the mechanism for the gradual adaptation of interest rates on issued loans with floating rates to changes in the key rate of the Central Bank. According to Law 106-FZ, legal entities that have taken loans with a floating rate are entitled to apply for “credit holidays” to pay interest. At the same time, shortfalls in income of credit institutions must be compensated by … the government of the Russian Federation. For the first of the three months of the holidays, the loan rate, on which the payment to the legal entity is calculated, cannot exceed 12.5%, for the second – 13.5%, for the third – 16.5%. Applications for credit holidays were accepted until June 1.

The government of the Russian Federation should establish “criteria and procedure” for determining the compliance of legal entities, according to which 70% of lost income associated with the provision of vacations is reimbursed by loans to banks, writes AKIT. At the same time, according to the president of AKIT Artem Sokolov, the criteria and procedure have not been established so far.

The law states that the reimbursement of lost income of banks should occur from 1 to 31 October. If by this time the procedure for compensation is not determined, then, according to the explanations of the Central Bank, banks must compensate for lost income by “redistributing it to the amount of the principal debt of the borrower payable after January 1, 2023.”

As Deputy Minister of Economy Ilya Torosov told Kommersant, the ministry prepared the criteria and sent them to the government: the borrower must be a tax resident of the Russian Federation, not be in the process of reorganization, liquidation or bankruptcy, not have debts for taxes, fees, insurance premiums, etc., as well as delinquencies on loans for which a transitional period has been established. “Also, the borrower should not have an interest rate risk hedging agreement on a loan, in respect of which a transitional period is established and there will be exceptions for certain types of activities that the government will additionally establish,” Ilya Torosov specified.

According to the estimates of the Ministry of Economy, based on data from the Central Bank, business debt, for which a transition period was granted, amounted to 5.9 trillion rubles. And if the discussion drags on and the criteria are not approved by October 1, then the banks will shift the payment of additional interest to the business.

According to Valery Emelyanov, an expert at BCS World of Investments, the average delay in business is now about 7%, and for companies that have taken advantage of credit holidays, it can exceed 10%. As a result, loans worth hundreds of billions of rubles may go into arrears, for which banks will have to create additional reserves.

Analysts note that even if the criteria are adopted, not all companies that took advantage of the holidays will receive compensation. Moreover, if there are only 10% of such organizations for which the government does not pay compensation, and only 10% of them also go into arrears, then banks will have to create additional reserves for 60-70 billion rubles.

According to Yulia Yakupova, Junior Director for Banking Ratings at the Expert RA agency, the situation is smoothed by the fact that the scheme for returning lost interest does not provide for the emergence of requirements for their lump-sum repayment, which reduces the burden on borrowers. “If the borrower does not meet the criteria set by the government, then the accrued interest increases the amount of the principal debt, then they are repaid in equal installments in accordance with the terms and frequency to be agreed between the borrower and the bank,” she explains. She believes that companies for which it will be problematic to pay these additional accrued interest will agree with banks on an installment plan or restructuring of the loan, and in this case, “there will most likely not be a significant increase in problem loans on the balance sheet of banks.”

Maxim Builov, Evgenia Kryuchkova