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Banks to offer three-month payment break to mortgage customers

Banks to offer three-month payment break to mortgage customers
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Banks are set to offer three-month payment break for mortgage customers.

A payment break up to three months, the deferment of court proceedings and the provision of working capital support are among the measures being introduced by the banks to support businesses and personal customers impacted by the Covid-19 pandemic.

The measures were announced following a meeting between the CEOs of the five main retail banks, along with their representative group, the Banking & Payments Federation of Ireland, and the Minister for Finance.

The banks – AIB, Bank of Ireland, KBC, Permanent tsb and Ulster Bank – said they would work collaboratively to ensure that continuity of service plans are in place and that critical functions can continue.

They added that staff would remain available to continue to service customers.

In addition to the measures being introduced by the banks, the Minister for Finance is requesting that the banking industry increase the limit on contactless payments to €50.

That would see it increase from the current limit of €30.

Paschal Donohoe said the increased limit would cover most transactions as the average value of debit card transactions is €41.52.

The Minister is also deferring the collection of stamp duty on credit cards to July. This is normally levied in April.

Minister Donohoe said he would legislate for this in due course.

The measures being introduced by the five main banks are as follows:

1. Implement a payment break up to three months for business and personal customers affected by Covid-19, to be followed by ongoing reviews depending on the scale and extent of the situation. Customers wishing to avail of a payment break should contact their respective bank.

2. The banks agree there is a need for a simplified application process to make it as easy as possible for businesses and personal customers impacted by Covid-19 to receive support from their banks.  We are working with all member banks to achieve this.

3. The banks want to ensure that any Covid-19 application for a payment break and further reviews will not adversely impact the customer’s credit record, and the banks reporting of these facilities. Banks want to avoid this and are meeting with the Central Bank of Ireland to urgently achieve a solution in this regard.

4. Banks will also defer court proceedings for three months. 

5. The banking system stands ready to provide working capital support. 

6. We have had initial discussions with Credit Servicing Firms and with those non-bank lenders who provide mortgages. Both the Credit Servicing Firms and non-bank lenders have issues which we need to address with the Central Bank of Ireland, but both are committed to working with the Government and industry to provide the flexibility that people need right now.