Moratorium on interest for military personnel may limit their access to loans – NBU.

NBU plans to review the moratorium on penalties and interest on loans for military personnel

The National Bank of Ukraine believes that the current moratorium on the accrual of penalties and interest on loans for military personnel may complicate their access to loans, particularly to credit limits on cards. The central bank calls for an objective assessment of the situation and possible legislative changes.

'Currently, there is a situation where the moratorium on the accrual of penalties and payment of interest for non-fulfillment of obligations concerning military personnel and their spouses may, instead of helping, become a reason for limiting the access of military personnel to consumer loans, especially in the form of credit limits on cards (the moratorium does not apply to secured loans),' the NBU stated.

The moratorium on penalties and interest was introduced by the government in 2014 to help military personnel who joined the Armed Forces of Ukraine and had loan debts. However, the number of military personnel has significantly increased, and interest-free loans may create problems for the banking system, the National Bank notes.

Advantages and risks of interest-free lending to military personnel

A lack of income for banks may disrupt the financial system, as they will not receive the necessary funds to cover costs and ensure the safety of depositors. The NBU indicates that some banks already offer free use of premium packages for military personnel and are ready to provide additional services.

'The National Bank is always open to dialogue on this issue and we have repeatedly raised it in discussions with government and parliament representatives to form a common objective assessment of the situation and to develop possible legislative initiatives aimed at a balanced resolution of this issue,' the NBU emphasized.

Discussions regarding the moratorium on penalties and interest on loans for military personnel are ongoing, and bankers are calling for clear regulation of this issue, as interest-free lending may threaten the financial system.