Latest Headlines

Non-performing loans will take time to resolve

The problem of non-performing loans will take some time to resolve due to the complexity of the problem said the Cyprus Central Bank’s Governor speaking before a parliamentary Committee.

non-performing loans

THE PROBLEM of non-performing loans is complicated and despite the progress made it will not soon or easily be resolved, the Governor of Central Bank of Cyprus Chrystalla Georghadji has said.

She was speaking before the parliamentary Committee on Institutions.

Georghadji said that some banks have progressed in reducing NPLs and others not.

She added that any delay in the start of restructuring of loans, was not the result of the banks’ lack of will, but was due to the fact that the banks didn’t have the necessary resources, knowledge or staff.

The Governor also said that in about six months a bill will be tabled in the Parliament providing for the reorganization and modernization of the Central Bank, pointing out that this would require a constitutional amendment.

Furthermore, she said the legal framework for the reorganization will be completed within a few days and will be sent to the CBC for comments, adding that the position of the legal advisers of CBC is that in any case an amendment of the Constitution will be needed, particularly as regards to the provisions on the exclusive powers of the Governor.

Georghadji also said that at this stage the Central Bank is unable to fill vacancies with permanent staff, because the Staff Committee can not convene since the resignation of a member.

A bill sent to the Parliament to fill the gap was rejected. The Governor also said that the position of the Ministry of Finance on the issues is that they should wait for the bill for the reorganization of CBC.

Replying to MP`s questions, the Governor said that the gold reserves of the CBC are kept in the Central Bank of a major European country and that the CBC has not signed for its sale.

She also said that the Central Bank is helping investigators in techno-economic level, regarding the investigations on Cyprus economy`s collapse.

The Governor also said that interest rates are at marginal levels and that further reduction of deposit rates will increase the risk of outflows.

“We try to keep the deposits because the economy has the burden of non-performing loans”, said the Governor, adding that lending rates are at their lowest point since decades.

She added that “we are reducing the risk by making our banking system more credible, to attract and retain deposits”.

Readers' comments

Comments on this article are no longer being accepted.

  • Deanna says:

    Sorry but this is just whitewash! Stop making excuses and focus on the largest NPLs first – and we can all guess where they are to be found…..

  • Tearing my hair out.. says:

    “She added that any delay in the start of restructuring of loans, was not the result of the banks’ lack of will, but was due to the fact that the banks didn’t have the necessary resources, knowledge or staff.”

    I’m sorry but if she is referring to NPL’s in the domestic sector (i.e.: not the millions handed out like sweeties to various developers) that is utter nonsense topped off with a fairly sizeable side-dish of denial.

    As early as 2009/10 – certainly our bank had very little “will” to do anything about re-structuring loans – and it most certainly was not for the want of trying (at all levels)! When they did ‘re-structure’ – it was almost invariably on worse terms than before!

    Plain & simple – they mis-led the borrowers and were working an arrangement with the lawyers and the developers. That’s why they kept shovelling these ridiculous amnesties out of the door.

    When will Cyprus officials stop putting the onus on the client – and face up to the elephant in the room?

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

  • Text size

Back to top