Special and Temporary Accounting Criteria Applicable to Credit Institutions

Dear Clients and Friends,

On March 25, 2020, the National Banking and Securities Commission (“CNBV”) jointly with the Ministry of Finance and Public Credit (“SHCP”), reported that, in order to mitigate the economic effects derived from the contingency due to the SARS-CoV2 virus (COVID-19), the CNBV has issued certain special and temporary accounting criteria applicable to credit institutions, thereby providing the necessary regulatory space so that credit institutions that so decide, can grant benefits to its clients whose payment source are affected by the contingency.

Benefits that may be granted:

As indicated by the CNBV, the support to be granted may consist, in general terms, of the partial or total deferral of principal and/or interest payments for up to 4 months, with the possibility of extending it to an additional 2 months, with respect to the due and payable balance of the credits, including accessories.

Balances may be frozen without interest charges, as long as the credits in question are classified as current (non-delinquent) as of February 28, 2020.

To what types of credits can the Benefits be applied to?

• Commercial Credits directed to companies or individuals with business activity in its different modalities, including agricultural ones.
• Revolving and Non-Revolving Credits directed to individuals, such as:
  • Auto Loans
  • Personal Loans
  • Payroll Loan
  • Credit Cards
  • Microcredits
• Home Loans with a Mortgage Guarantee

How will the benefits be applied?

It is important to note that benefits will be given at the discretion of each credit institution, according to its implementation processes and taking into account the particular conditions of each borrower.

For its part, the Mexican Banks Association, through a press release issued on March 26, reported that credits which are part of the “Permanent Program of Support for Natural Disaster-Affected Areas” or loans that are already part of some other benefits program, will be excluded from the new benefits, and called on clients who need support to reach out to their respective banks to jointly seek a solution that best suits them.

We’ll keep you informed of any additional measures taken by both authorities and credit institutions to mitigate the effects of COVID-19.