LONDON (Reuters) - European Union regulators have revived guidance to allow banks to grant a new round of loan repayment holidays to coronavirus-hit customers until March without triggering a big surge in provisioning that would crimp the flow of credit. The European Banking Authority (EBA) said on Wednesday that, due to the second wave of COVID-19 infections, guidance for banks that expired on Sept. 30 was being reactivated until March 31, a move welcome by the banking industry. Without the EBA’s guidance, which was first introduced in April, banks would have to start automatically provisioning for loans not repaid 90 days after the due date, making them less likely to keep lending to the COVID-hit economy. As the first set of lockdowns from March closed businesses, banks began granting payment holidays on company loans, mortgages and other credit. By June, loans totalling 871 billion euros ($1.05 trillion) had benefited from the relief measures. EBA said loans that did not previously benefit could now also benefit from the reissued guidance but it said it had introduced two “constraints” this time to ensure problem loans were being recognised by lenders in some way. Loans could only benefit from a repayment holiday for nine months in total and banks must spell out plans for assessing whether loans subject to payment holiday were likely to default, EBA said. Lars Overby, EBA’s head of the risk-based metrics unit, said the full impact of payment holidays on lender balance sheets would only gradually unfold over 2021, probably with increasing clarity after next summer. Actual losses and capital requirements would also depend on mitigants such as state guarantees on some business loans and overall economic recovery, Overby said. The European Banking Federation, an industry body, said EBA’s announcement opened the door for EU countries to offer payment holidays again. “The economic impact of the second wave makes clear that extraordinary support will still be required in the coming months,” a federation spokesman said.