Implementation of Syndicated Credit Agreements by Conventional Commercial Banks during the COVID-19 Pandemic

Abstract

The global spread of COVID-19 in 2020 has led to a decrease in lending and an increase in bank credit risk due to a decline in debtor performance. As an effort to mitigate this impact, banking authorities in various countries have issued guidelines related to easing loan terms and conditions for debtors affected by COVID-19. The Indonesian government through the OJK has issued several national economic stimulus policies that provide concessions to debtors affected by COVID-19. This study will focus on discussing the concept of syndicated credit agreements in Indonesia and the syndicated loan restructuring policies that are enforced in normal times and during the COVID-19 pandemic. As for the discussion, a comparison of rules and policies in other countries will also be presented, as comparison material for review. This study found that there are similarities in the legal construction of ordinary credit agreements and syndicated loans so that the OJK Regulation No.11/POJK.03/2020 and its amendments can be applied to syndicated loans as well. The leniency given to debtors in terms of restructuring during the pandemic includes the quality of restructured loans, approval mechanisms, ceilings, restructuring period.