On March 16, Rwanda Development Board (RDB) issued a communiqué ordering all bank auctions to comply with the new preventive measures against the spreading of coronavirus, COVID-19. In the communiqué, the Registrar General notified all concerned parties that; “All ongoing public auctions, and provision of the document containing the selling terms and conditions of the mortgage, are halted from Tuesday, March 17, for a period of two weeks.” According to the registrar, the decision was premised on an observation that venues, where such auctions are carried out, were seen to host large gatherings. When does a bank auction occur? Normally, the bank auction process is initiated when a borrower defaults on three consecutive equated monthly installments. An equated monthly instalment is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. These installments are used to pay off both interest and principal each month so that over a specified number of years, the loan is paid off in full. The customer is sent reminders after 30 working days that s/he has failed to pay instalments. Reminders are sent in forms of letters and phone calls. A borrower can pay the instalments and this reminder is withdrawn. A borrower can also submit his objection within 60 days with justification for the non-payment of equated monthly payments. In case no reply is received from the borrower or if the bank is not satisfied with the reply provided, then the bank can initiate an auction process. Once this notice expires after 60 days, the bank can auction the property after 30 days.
