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Spanish government says banks must comply with loan scheme extension

MADRID, Nov 17 (Reuters) - The Spanish government on Tuesday ordered banks to comply with its extension of state-backed credit lines by six months until June and provide such loans with longer maturities and grace periods at clients’ request, the economy minister said.

Nadia Calvino told a news conference bank clients who have no overdue payments can request such loans.

At its regular meeting, the cabinet also approved an extension, until March, of restrictions on forced bankruptices of companies affected by the coronavirus pandemic to avoid the so-called cliff effect from the withdrawal of some support measures next year.

Guarantees on the state-backed credit lines, designed to help companies amid the pandemic-induced economic crisis, were extended to up to eight years from the originally planned five on most loans.

An extra year was added to the grace periods, which allow borrowers to delay payment without being charged late fees, being found in default or having their loans cancelled. (Reporting by Belen carreno, writing by Andrei Khalip)

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