On 7 April 2020, the Dutch Banking Association (Nederlandse Vereniging van Banken, NVB) responded to DNB consultation on specific provisions of CRD and CRR 2019 in the context of the COVID-19 pandemic.
22 May 2020
The coronavirus outbreak has far-reaching consequences for the Dutch economy and for the financial sector. The measures taken to contain the health risk have a major impact. Banks are ready to do what is possible for their customers in this uncertain time.
Against this background, the Dutch Banking Association (NVB) considers the temporary reduction of the systemic risk buffer requirement proposed by De Nederlandsche Bank to be positive. This allows the banks to deploy additional capital to support their customers.
On 16 April 2020, the Dutch Banking Association (Nederlandse Vereniging van Banken, NVB) published a Covid-19 Monitoring and Overview of schemes for entrepreneurs during the covid crisis.
Since the outbreak of the corona crisis in March, banks in the Netherlands have temporarily given 105,000 entrepreneurs and more than 17,000 consumers more financial support in addition to the government's support package. The postponement of repayments and the provision of loans or more credit space to companies now amount to 5.4 billion euros.
In addition, it is expected that, through the extended SME Loan Guarantee (BMKB-C) , banks have provided additional credit to approximately 800 to 1,000 companies this week, which otherwise could not be financed through the banks. This provision will involve an amount of 250-350 million euros. The number of loans in this segment is expected to rise by several thousand in the coming weeks.
Unlike the deferral of repayments, this is a new loan for business customers. Entrepreneurs must provide financial information about how the company is doing and how turnover and cash flow develop, which often takes time. After submitting an application to the bank, the average turnaround time is ten to fourteen days, largely for obtaining the necessary information from the customer. Banks must make an individual credit assessment for each application to determine whether the additional loan is justified. Businesses should be fundamentally healthy and should be able to repay a new loan after the crisis.
This article was originally published in the April edition of REGWATCH. Read the full edition covering the following jurisdictions:
- European Union
- Hong Kong
- United Kingdom