Thursday, August 6, 2020
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ECONOMY | 25-03-2020 16:33

Clearing banks freed to pay salaries during quarantine

Central Bank to allow the financial system to resume processing cheques, in order to allow the payment of wages.

The Central Bank has decided to allow the financial system to resume processing cheques as from Thursday as the end of the month approaches, in order to allow the payment of wages.

The monetary authorities had previously planned to suspend the writing and cashing of cheques for the full distance of the quarantine against the pandemic (due to run until the end of this month at least), confirming this decision on March 20, but yielded to business pressures following a special meeting on the impact of coronavirus last Tuesday.

Small and medium-sized firms in particular (or the PYMES, as they are usually called here, in reference to their Spanish acronym) had complained that the chain of payments was jeopardised by an acute liquidity crisis with suppliers the victims as well as employees. The long weekend had already created a substantial backlog. 

The Central Bank communication accompanied by a presidential decree also frees other banking services such as loading ATM cash machines and granting loans, as well as "continuing the services usually rendered in remote form such as setting up fixed-term deposits.”

This decision thus authorised the automatic cashing of cheques deposited by key sectors such as supermarkets, service stations and public transport companies, among others. 

The communication further specifies that “these days (before March 26) will not count towards the 30-day deadline for presenting cheques” while the obligatory closure of insolvent bank accounts with bouncing cheques is suspended until April 30, as are the concordant fines. Furthermore, banks may not deny credit to companies with social security contribution arrears.

Various health and hygiene precautions in the light of the pandemic are also mandated – on Tuesday Central Bank Governor Miguel Ángel Pesce reported one confirmed case of coronavirus among his staff. ​

– TIMES/PERFIL

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