The Central Bank has published a revised statutory Code of Conduct for Business Lending to Small and Medium Enterprises effective 1 January 2012 which sets out new requirements and procedures for lenders when dealing with SMEs in, or facing, financial difficulties. Under new provisions introduced by the Code, lenders must confirm to an SME the information that must be provided by them for an alternative repayment arrangement assessment to be undertaken to address financial difficulties. A lender must complete such assessment and inform the SME of its decision within 15 business days of receiving the relevant information. A lender must also put procedures in place to allow an SME a reasonable period of time to appeal its decision on an alternative repayment assessment where an SME is not willing to enter into an alternative repayment arrangement offered by a lender.

The new Code has been introduced following a review of the financial difficulties requirements in the existing code as part of the Central Bank’s commitments under the EU/ IMF Work Programme. A full review of the Code will be undertaken in 2012 which will provide stakeholders including SMEs and their representatives with an opportunity to engage further in the operation and effectiveness of the code.

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