Central Bank of Cyprus technocrats have assured MPs that a complaints mechanism targeted at borrowers who feel unfairly treated by their bank is almost ready for set up.
The technocrats who yesterday briefed the House Finance Committee also said that the mechanism’s framework text will be sent to parliament within a couple of weeks. And, after the European Central Banks also gives its approval.
The mechanism will protect, for example, a borrower whose bank does not exhaust all options to restructure a loan before sending him/her a foreclosure notice.
Committee chairman Angelos Votsis of centre Diko party made clear that CBC should do its best to have the text finalised the soonest possible. Especially since the supervisory body’s technocrats assured that 80 to 90% of the document has been drafted. CBC’s internal goal is to have the text finalised by end of this week.
Asked whether the mechanism’s document should be regulated, CBC’s representatives replied that this is the goal. MPs also wondered whether the current code of conduct of the Central Bank applicable to loan restructuring had problems with its implementation. One technocrat said some weaknesses had emerged from on-the-spot inspections.
In addition, the CBC technocrats made clear that there would be specific conditions in the text preventing any possible abuse but they refused to elaborate. At the same time, Finance Ministry representative George Panteli told MPs that they are cooperating with the Central Bank on this.
Based on latest data by the Central Bank, total loans restructured by end of March 2019 amounted to €6,464 million, of which €4,596 million are still part of recorded non-performing loans.