Tweet

Email

The House Finance Committee on Thursday discussed concerns over recent banking practices including a deluge of letters being sent to loan holders and guarantors and a failure to respond to borrowers asking to restructure their loans. Speaking after the Committee meeting Nicolas Papadopoulos said the MPs had been briefed by representatives of the Central Bank, Association of Cyprus Banks and the Law Office of the Republic regarding the issue of banks sending out a deluge of form letters demanding the repayment of loans. Papadopoulos revealed the committee was informed the letters had been sent out on the Central Bank’s instruction. “It was the Central Bank itself which asked all the banks to inform borrowers, guarantors, and all interested parties about the demands they have to face up to,”Papadopoulos said.

He added, in line with what MPs had been told: “No processes have yet been started based on the new repossession legislation since there is a 120-day time limitation so it would be impossible for any procedures to have begun.” Papadopoulos said the bank representatives had said they were at the stage of studying the law and deciding what their next steps would be. He added, according to as yet not finalised data provided by the Central Bank, “Of the €28 billion, some €3 billion has been restructured” until now.

Green Party MP George Perdikis expressed concern over the Central Bank’s stance, adding he believed it was “burying its head in the stand as it does not recognise any pressure being put on lenders by the banks.” “It considers it completely normal for people with small loans of between €3,000 and €5,000 to be bombarded with letters. It considers it completely normal that until now only a very small percentage of loans, just 10%, have been restructured. It also thinks it is normal for banks to continue to violate their own codes,” Perdikis said.

The MP suggested the Central Bank and banks were in cahoots to damage those with small loans and other “weak links” in Cyprus’ economy. -