Filenews 9 January 2021
The "green light" for the suspension of instalments to financial institutions was given to the Ministry of Finance by the Central Bank of Cyprus (CBC).
A related communication states that the CBC "continues to monitor developments in the economy in full awareness of the negative consequences of the pandemic". With a view to mitigating these effects on businesses, households and the banking sector in order to safeguard and strengthen the financial stability of the country, the CBC decided to give its assent, through its Governing Council to the Ministry of Finance, on the suspension of instalments to financial institutions within the framework of the Guidelines of the European Banking Authority (EAT).
The Guidelines were adopted by the EBA Board of Supervisors, in which the CBC participates, and it is stated that under the relevant law, the decree will be issued by the Minister of Finance.
"The suspension of instalments is targeted to support the liquidity of businesses and households facing the biggest short-term liquidity problems due to the pandemic. At the same time, sensitive categories of borrowers whose obligations are secured from their first residence with a market value of up to €350 thousand will also be supported", it is noted.
The CBC also decided to extend until 31 March 2021 the measure it announced in March 2020 to make it easier and immediate for banks to provide short-term loans to businesses and households to cope with the current economic difficulties. In particular, it is stated, the CBC maintains the relaxation of the criteria for granting new short-term credit facilities until 31 March 2021, with a view to helping affected businesses and households to immediately obtain the liquidity they need to meet their current liabilities.
The criteria, which are relaxed, concern how to assess repayment capacity and the evidence should be provided by borrowers to the banks, aiming at faster procedures on the part of banks.
The CBC assures that it will continue to monitor developments and exercise its responsibilities in such a way as to safeguard and further strengthen the country's financial stability.
Source: CYPE
