banking & finance
The pandemic has made it hard to organise traditional deal closings. Earlier, in typical financing transactions, it was no problem to arrange a physical meeting of the parties to sign the complete set of financing documentation, including security instruments (e.g. a pledge agreement or agreement to establish a mortgage). Indeed, some clients insisted on holding a traditional closing. The pandemic has changed this perspective, focusing the parties’ attention on the possibilities for remote signing of agreements.
With increasing mobility on the labour market, more and more foreigners from non-EU countries are settling in Poland for economic reasons. As most often salaries are paid by bank transfer, one of the first issues when relocating is to open a bank account in Poland. To keep up with market changes, Polish banks try to make their offers more flexible and adapt them to customers’ current needs. Thus banks offer many services aimed at foreigners, including those from non-EU countries, and banking products are becoming more and more available to them.
Assignment of rights for security is a popular method of securing claims on the Polish market. This is due to the great flexibility of this instrument and the absence of such formalities as registration in court. In short, such assignment consists of transferring to the lender claims held by the borrower against third parties (e.g. receivables for the sale of goods). If the credit is not repaid on a timely basis, the proceeds from the claims assigned for security can be used to satisfy the lender’s claims. But can the rights under a promissory also be assigned in this manner?
Businesses affected by COVID-19 are frantically seeking help. Direct forms of assistance, such as the financial shield and standstill pay, are extremely popular. Meanwhile, another instrument of the Anti-Crisis Shield has begun operating recently, i.e. loan repayment guarantees granted by Bank Gospodarstwa Krajowego to medium-sized and large enterprises from the Liquidity Guarantee Fund. The programme, worth over PLN 100 billion, is designed to encourage commercial banks to grant new loans for liquidity purposes.
In the new economic reality, businesses that took out loans may be asking themselves many questions. Will existing loans still be paid out? Will an expiring credit line be extended? And will the state of epidemic justify not repaying debt already incurred?
On 16 March 2020 the Polish Bank Association (ZBP) published a statement on helpful actions to be undertaken by Polish banks in connection with the COVID-19 pandemic. The statement clearly shows that banks recognise the need to take urgent action in response to anticipated difficulties borrowers will have in performing their obligations. Banks are also assuring customers that such actions will involve introduction of simplified, less formal procedures for assisting borrowers finding themselves in financial difficulty due to the coronavirus pandemic.