The Central Bank of Malta repeals Directive no. 18 on Moratorium on Credit Facilities in Exceptional Circumstances
On 3 May 2024 the Central Bank of Malta (hereunder the ‘CBM’) repealed Directive No. 18 on Moratorium on Credit Facilities in Exceptional Circumstances (hereunder the ‘Directive’).
The main objective of the Directive, which had come into force on 13 April 2020, was to implement the provisions of regulation 6 of the Moratorium on Credit Facilities in Exceptional Circumstances Regulations (Subsidiary Legislation 465.40) which regulations were issued under the Public Health Act (Chapter 465 of the Laws of Malta) in order to provide eligibility criteria for borrowers affected by the COVID-19 outbreak seeking a moratorium on credit facilities granted by credit institutions and financial institutions established in Malta.
The moratorium was granted on payments of capital and interest unless the borrower had decided to continue to pay the interest as provided in the Directive in further detail. The Directive’s aim was to temporarily provide specific measures to alleviate the financial burden on certain borrowers and was issued to allow an amount of flexibility in loan repayments. Some of the credit facilities were excluded, and borrowers had to satisfy certain criteria as therein listed in the Directive.
In response to the end of the moratorium periods provided in the Directive as well as the stabilisation of the economic activities post COVID-19, the CBM has announced that the Directive is being repealed in its entirety with immediate effect.
The list of all the CBM Directives may be accessed here: https://www.centralbankmalta.org/en/centralbankofmaltadirectives
This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr Michael Psaila or Dr Sarah Zerafa Lewis.