InsiderEconomy‘Estia’ stuck in legal issues

‘Estia’ stuck in legal issues

It seems that the implementation of the much publicised ‘Estia’ scheme and the introduction in Cyprus of electronic auctions are stuck in legal and procedural issues. And all these difficulties have surfaced seven months after parliament voted in favour of strengthening the scheme’s  framework so as to tackle the big issue of red loans.

Under the new framework, real estate of strategic bad loan takers would be electronically auctioned while the primary house of an indebted person would be protected through ‘Estia’.

Nonetheless, nothing has been implemented so far because the relevant online platforms are not ready yet. Despite the fact that provisions of ‘Estia’ have been amended, the European Commission’s approval was granted, and after parliament first voted against and then in favour of the €33 million budget.

An informed source told Phileleftheros that the prevailing legal issues concern the transfer of personal data of borrowers to the platform through which applications for participation in the scheme will be submitted electronically.

Efforts are currently taking place to ensure that there is no violation of the law on personal data protection due to the personal data that borrowers will be required to submit.

Another delay seems to arise from the memorandum that banks will have to sign with the Government, according to the same source. The Memorandum is before the Legal Service for a review with provisions examined one by one, and with a number of legal ambiguities recorded.

A third reason for the delay appears to be the way the thousands of cases to be included in ‘Estia’ are processed. In particular, efforts are underway to simplify the procedure of examination of applications. Interested parties have to submit way too many documents as well as other data on loan restructuring and property valuations as guarantees for a non-performing loan to be included in the scheme.


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