Credit installments that are not paid on time will no longer have help given in a pandemic

As of January 1, 2023, the installments of consumer loans and microcredit in all its modalities, productive and educational, that are not paid within the expiration date will no longer have a term to go to the overdue portfolio, as they had during the pandemic. For this reason, some banks began to remind their clients of this change so that they take precautions and thus maintain a good credit profile.

And it is that the Superintendency of Banks issued in August the resolution no. SB-2022-1606, which establishes that as of next January 1, the dividends of the credits that have not been paid in a timely manner, within their maximum payment date, they will be transferred to the overdue portfolio as of the 31stwith the exception of housing loans, which will continue with the current portfolio transfer conditions.

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The delinquency conditions changed in 2020. In that year, the then Monetary and Financial Policy and Regulation Board issued a resolution that extended the period for registering the “overdue step” of credits in arrears to 60 days.

This gave a mechanism “practical, homogeneous and attached to the banking technique that allowed cushioning the shock of the rupture in the payment chain generated by the pandemic and, at the same time, allowed banks to maintain their ability to support customers who still required some type of financial relief”, indicates the executive president of the Association of Private Banks from Ecuador (Asobanca), Marco Rodríguez.

With this resolution, the delinquent loan portfolio has a longer accounting time before being registered as overdue, for which the delinquency indicator gives greater slack, benefiting customers, who did not see their credit rating affected. But that measure will only be in force until December 31, 2022.

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With these changes made in the pandemic, Ecuador provided flexibility so that the client’s rating does not deteriorate so quickly, and also allowed banks to make a level of provisions that is more in line with the complicated economic reality that many of their clients were going through adds Rodriguez.

However, from January 1, 2023, the dividends of the loans that have not been timely paid, within their maximum payment date, will be transferred to the overdue portfolio as of the 31st. For housing loans, it is from within 60 days, according to the resolution of the Financial Policy and Regulation Board, considering the reactivation of the economy and international standards.

Along these same lines, the Superintendency of Banks, in compliance with the provisions of the Financial Policy and Regulation Board on this issue, issued resolution No. SB-2022-1606, with which it adapted the standards applicable to accounting for financial entities, adjusting them to the norm that will be applied from January 1, 2023, explains the bank. (YO)