In light of the challenges brought about by the COVID-19 outbreak to the economy and operations of corporates, the HKMA together with the Banking Sector SME Lending Coordination Mechanism announced on 17 April 2020 the launch of a Pre-approved Principal Payment Holiday Scheme for eligible corporate customers (the Scheme) on 1 May 2020. Under the Scheme, banks in Hong Kong will offer principal payment holidays to covered corporate borrowers on a pre-approval basis.The Scheme has been extended twice in November 2020 and May 2021, for 6 months each time, to end-October 2021.
1 May 2020
Am I an eligible customer for the Scheme?
Covered borrowers are corporate borrowers which:
- have, on an entity basis, an annual sales turnover of HK$800 million or less, based on their latest financial statements;
- with no outstanding loan payments payable to the bank which have been overdue for more than 30 days at the Launch Date; and
- are not in the process of ceasing operations or declaring bankruptcy or liquidation.
The HKMA requests all banks to participate in the Scheme. Customers may contact their banks to enquire about their eligibility.
Contact list of banks
What are the payments covered under the Scheme?
- All loan principal payments, including mortgages, vehicle loans and trade facilities, of eligible customers falling due within a 6-month period between 1 May 2020 and 31 October 2020 will be pre-approved for deferment. Principal payments of loans will generally be deferred by 6 months.
- Under the announcement on 2 September 2020, all loan principal payments of eligible customers falling due between November 2020 and April 2021, irrespective of whether or not a loan has been on a principal payment holiday, will generally be deferred by six months.
- Under the announcement on 4 March 2021, all principal payments of loans falling due between May and October 2021, irrespective of whether or not a loan has been on a principal payment holiday, will generally be deferred by another six months.1
- For trade facilities, given their short-term nature, the principal repayment will be deferred by 90 days.
- Under the deferment arrangement announced on 5 August 2020, trade facilities both currently subject to the Scheme as well as those drawn between 1 May 2020 and 31 July 2020 by eligible customers with no outstanding payments overdue for more than 30 days as at 1 August 2020 and falling due before 31 October 2020 will be covered.
- Under the announcement on 2 September 2020, the repayments of trade facilities falling due between 1 November 2020 and 30 April 2021 will be deferred by 90 days.
- Under the announcement on 29 January 2021, the repayments of trade facilities falling due between 1 February and 30 April 2021 as well as those drawn down from November 2020 to end-January 2021 will be deferred by another 90 days.
- Under the announcement on 4 Mar 2021, the repayments of trade facilities falling due between 1 May and 31 October 2021 will be deferred by another 90 days.2
- Under the announcement on 15 July 2021, the repayments of trade facilities falling due between August and October 2021 as well as those drawn down from May to end-July 2021 will be deferred by another 90 days.2
- For revolving facilities (e.g. corporate credit cards and overdraft lines) with facility limits that are due for review from the Launch Date of the Scheme to 31 October 2021, the bank should not adjust downward the existing facility limits within 6 months from the review dates.
- Syndicated loans or loans used to financing purchases of shares or other financial assets are not covered.
- For facilities which are self-liquidating in nature, banks may require the loan to be settled when the underlying payment has been received by the customer.
How to apply?
Eligible customers do not need to apply for the Scheme. Banks will inform eligible customers of the pre-approval under the Scheme and eligible borrowers are only requested to contact the bank within 14 days of the bank’s notice to confirm the detailed arrangements of the deferment.
In regards to the extension of principal payment holidays announced on 5 August 2020, 2 September 2020, 29 January 2021, 4 March 2021 and 15 July 2021 banks will not issue individual notifications to eligible customers regarding the extension of the Scheme. Corporate customers in need of relief are requested to contact their banks. Banks will handle each eligible customer’s case on a "pre-approved" basis. Banks may request customers (especially those who have been granted multiple extensions of payment holidays) to provide up-to-date business and financial information to better understand their needs when processing their cases.
Enquiries or feedback
For any enquiries or feedback for the Scheme, you may contact the HKMA's dedicated email account: email@example.com or enquiry hotline: (852)2878 1199.
1 For loans which have been extended for 540 days or more cumulatively since first being drawn down, banks can adopt a flexible approach and consider, on a case-by-case basis and subject to prudent risk management principles, whether other forms of relief are more suitable to help the customers ride out the current difficulties.
2 For trade loans which have been extended for 270 days or more cumulatively since first being drawn down, banks can adopt a flexible approach and consider, on a case-by-case basis and subject to prudent risk management principles, whether other forms of relief are more suitable to help the customers ride out the current difficulties.