To deal with the various impacts of COVID-19 on our country, various ministries have proposed assistance measures, and banks may help to provide such assistance if they wish to. Regarding the debt workout mechanism for individuals who have difficulties in repayment due to the impact of the epidemic, the FSC on February 14, 2020 invited the Bankers Association and some of its member banks to a meeting to discuss a debt workout mechanism for individual borrowers. Meeting participants concluded as follows:

1. Parties eligible to take part in debt workouts: Parties that are having repayment difficulties in repayment due to the epidemic.

2. Types of debts that can be address through debt workouts: Personal financial products, including mortgages, auto loans, consumer loans, and credit card debts.

3. Debt workout measures:

(1) Credit card debts: Cardholders experiencing difficulty in paying credit card debts can apply for a deferral of 3 to 6 months. During the deferral period, liquidated damages and revolving interest will be waived.

(2) Other personal loans: Individuals may apply for 3- to 6-month deferrals of principal or interest payments. During the deferral period, liquidated damages and deferred interest will be waived.

4. Period of debt workout mechanism: From February to the end of July 2020.

5. Personal credit records: A debt workout is an agreement between a debtor a bank. It is reached under special conditions, and remains in effect for a short period of time. The terms of a debt workout stipulate that a debtor does not need to pay principal or interest during the deferral or rescheduling period. Until an obligation comes due it will not be treated as a bad debt, and an instance of late payment will not be included in the debtor''s credit record.

  

The FSC instructed the Bankers Association to forward the conclusions of the above meeting to members banks for reference. Furthermore, in order to provide loan-related information for the public, the FSC asked the Bankers Association to collect information on the loan products and debt workout measures provided by all banks, post this information to a special page on its website, and provide a URL for the reference of ordinary consumers.

 

In order to prompt banks to strengthen their COVID-19 measures enough to ensure uninterrupted business operations, the FSC has asked banks to take the following measures:

1. Since the beginning of the epidemic at the end of January, the FSC has investigated how domestic banks'' offshore branches in China, Hong Kong, and Macao have been dealing with the epidemic. Focal points of the investigations have included the health status of employees, the start date of business, and working arrangements, and the investigators have reported back regularly on their investigation results.

2. All domestic banks are requested to plan appropriate anti-epidemic and contingency measures, and immediately inform the FSC by telephone if domestic and foreign employees have confirmed cases or the work arrangements of any domestic or foreign branches are changed in response to the epidemic.

3. In order to ensure the safety of personnel, the management units and branches of each bank''s head office should frequently disinfect the office environment and business premises to eliminate possible sources of infection.

4. The head offices of banks should fully assist business units by providing disease control materials, and in making work assignments they should observe the principle of respecting employees'' wishes.

5. All banks should develop disaster emergency response measures with an eye to the status of the epidemic, following the "Directions for Disaster Prevention and Rescue Operations of Financial Institutions." A bank''s general manager should act as the convener of the bank''s disaster emergency response team, establish a command center, and monitor various possible situations.