Debt Relief for Virus-Hit Businesses

EghtesadOnline: The Central Bank of Iran on Saturday announced financial relief to businesses battered by months of lockdowns to curb the Covid-19 pandemic.

News ID: ۷۵۱۷۳۸

27 December 2020

Proposed by the National Coronavirus Headquarters "non-government businesses hit by the virus are allowed to defer two loan repayment installments".

Debt repayments that matured in the last calendar month to Dec. 20 and those that mature by the end of the current month (January 19) will be eligible for the relief on the condition that their debt is in the ‘performing loans’ category.

Loans that are supposed to be reimbursed in lump sum, the relief is period is one month. As for bounced checks, the CBI has relaxed rules exempting checkbook holders with bounced checks from some rules governing bad checks.

As per the directive, those who issue checks with non-sufficient funds in their accounts and whose checks mature from Nov. 21 till Jan. 19 will be exempt from penalties that restrict their access to banking services, such as getting new checkbooks.

It seems the waivers cover restrictions on issuing new checks to avoid further harm to already troubled businesses, and excludes other penalties such legal prosecution.

With the third wave of coronavirus outbreak reaching a peak in recent weeks, the government announced a two- week total lockdown to contain the deadly disease. Starting Nov. 21, more than 150 cities, including Tehran, moved from partial to full lockdown.

The number of deaths and infections has declined in recent days thanks lockdowns of the past two months to stem the spread of the deadly disease.

The deadly virus has hit a wide range of businesses in Iran since its outbreak almost a year ago. The list of businesses eligible for corona financial relief is lengthy, namely businesses responsible for preparing and selling meals, businesses active in tourism and hospitality sector, transport companies, namely air, road, rail and marine transportation, intra-city public transport companies, travel agencies, apparel manufacturers and distributors, confectionaries and shops selling nuts and dried fruits, gyms, sports and leisure centers.

In a similar decision earlier in the month, the government extended the repayment deadline for troubled loans taken out by manufactures by the end of current fiscal (March).

Debt restructuring was proposed by the National Coronavirus Headquarters as part of measures to help manufactures ravaged by Covid-19, said Mohammad Nahavandian, vice president for economic affairs said.

"The deadline was initially extended to the last yearend (March 2020) but as many companies were unable to service their debts due to coronavirus" the timeline was extended again, Nahavandian said.