Filenews 30 October 2022 - by Eleftheria Paizanou
ELAM attempts to provide incentives to consistent borrowers, by reducing their loans and at the same time offering facilities to those who find it difficult to fulfil their loan agreements, with proposals for legislation submitted to the Plenary Session of the Parliament.
In the middle of the election period, the bills will be the subject of debate due to inflation, rising interest rates and punctuality, however, they seem likely to address some legal issues. At the same time, technocrats argue that these bills may cause risks to the banking system and the economy in general. Specifically, the first draft law seeks to introduce legislation regulating the 15% write-down of loans to consistent borrowers who normally pay their instalments to banks, from the day they have concluded the loan agreement until today. According to the reports, the arrangements are necessary to incentivise well-paid borrowers to continue to repay their instalments, without measures being taken against them in relation to borrowers who do not service their loans.
At the same time, ELAM proposes an amendment to the Law on the Business of Credit Institutions, so that, in case of exceptional cases, when borrowers do not pay the instalment agreed with the banking institution, the loan is not considered as non-performing! A third proposal proposes restrictions on banks, loan acquiring companies and credit servicers when they require additional collateral from borrowers, when the loan amount is oversubscribed by the mortgage on the property. It has been observed that these organisations do not fully comply with guidelines and best practices when assessing and restructuring loans, when requiring personal guarantees and when the loan is oversubscribed by a mortgage.
