BANKS will submit new revised and improved repayment plans to the Cyprus Central Bank for the regulation of loans in Swiss Francs.
Speaking to the Parliamentary Committee on Finance, a representative of the Central Bank said that after meeting with the association of banks and concerned banks, they came to the conclusion that it is difficult to have a single plan for all banks and borrowers.
However, he said, that the banks agreed to submit revised plans, taking into account the benefit of the borrower, the interest rate differential, the amount borrowed and the date of agreement of the loan.
He also noted that in case of loan repayment more favourable terms should be given to borrowers and he suggested that banks should present to borrowers a good repayment plan with a lower interest rate.
He added that banks will submit statements to the Central Bank showing the number of loans restructured and how many were written off.
He stressed that the Central Bank cannot proceed to any other actions because anything done for systemic banks requires European Central Bank approval.
According to the representative of the Central Bank next week the central bank will send a circular to banks for submitting revised plans, stressing that it will concern loans made in Swiss Francs in order to purchase a primary residence.
On behalf of the association of banks it was reported that there are already plans by banks and arrangements are already underway.
A representative of the association pledged that plans with more favourable terms will be submitted, which will be monitored on a quarterly basis by the Central Bank.
He said that existing plans include loss absorption by the bank, write off of the principal capital and suspension of instalment payment, adding that plans to be submitted will be on this basis.
Discrimination primary residence or not it’s still Swiss franc. Is Cyprus in Europe where is the European union in this matter of Swiss franc scam in Cyprus.?
If they go ahead with this discrimination they will make matters even worse for themselves the banks of course.
To paraphrase Sir Winston Churchill’s famous speech (praising those in the Battle of Britain) when it comes to the Cyprus banks: Never before have so many dithered for so long – to achieve so little.
Banks have lost complete sight of the underlying philosophy of contracts – that is – a contract should benefit BOTH parties involved.
Whilst they fail to acknowledge that – the problems will persist and the Cypriot economy will stagnate.
It’s discrimination then. If a product is not fit for purpose then it does not matter whether it’s for your primary residence or not. The banks have previously played this game with interest rates. Keeping them high for holiday homes.
“Primary residence”? is the suggestion here that loans for holiday home will not be considered as part of this review?
(Editor’s comment: It certainly looks that way but we’ll have to wait and see what the banks propose.)