On March 30, President Sebastián Piñera announced the enactment of an Executive bill to mitigate the economic impact of the coronavirus on Chilean citizens and SMEs. The Financial Market Commission (CMF, for its acronym in Spanish) has also just informed of its decision, in coordination with the Central Bank of Chile, to postpone the implementation of the Basel III requirements for one year and to maintain the general regulatory framework in force for banking capital requirements until December 2021.

The President announced the early enactment of an executive bill aimed at reducing the economic impact of the pandemic by awarding beneficiaries of the Single Family Grant a $50,000 bonus, as well as the tutors in charge of minors, the disabled and pregnant women, as long as they are among the 60% of the population’s most vulnerable citizens. Beneficiaries of the Insurance and Opportunities program, and all households which fall into the 60% bracket which have no formal work income or a pension, will also be eligible for the bonus.

Meanwhile, the Stamp Tax rate has been temporarily slashed to 0%, applicable to money credit operations carried out between April 1 and September 30 of this year, to lower the costs of credits requested by individuals and companies.

The Finance Ministry has also been authorized to make an extraordinary capital contribution to BancoEstado of up to US$500 million within a one year period, while the Chamber and Senate Finance Committees must be informed of the destination of the resources and the allocation criteria. 

The CMF has also reported its decision to postpone the implementation of Basel III requirements by one year in order to give banks greater flexibility in setting up provisions to accommodate changes in their debtors’ payment conditions, to the benefit of bank customers. The extension of the deadlines is expected to complement other measures announced by the financial authorities to boost the economy.