The Cabinet approved Wednesday another action under the Recovery and Resilience Plan, focusing on the framework and action plan for Non-Performing Loans (NPLs), as announced by the Minister of Finance, Makis Keravnos.

The Minister stressed that the government will continue to promote the appropriate measures for the maximum utilization of European programs and funds, particularly the financial support through the Recovery and Resilience Plan.

When asked if there were any updates regarding the reduction of bank interest rates or taxing their profits due to rising interest rates, Keravnos stressed the need to narrow the gap between lending and deposit rates.

"I have observed certain moves by banks through the interventions of the Ministry of Finance and the government in the last few hours, which I will discuss with them at the scheduled meeting. I hope and will insist that there will be a response to the goal I have already mentioned," he added.

Keravnos explained that the action of the Recovery and Resilience Plan, approved by the Cabinet, consists of two milestones.

The first as he said, concerned loan management by credit acquisition companies and specialized management companies, noting that it has been fulfilled based on the legislation that has been approved.

The second component, he added, involves the preparation of a progress report to the Cabinet, tracking the progress of NPLs in relation to indicative targets set within the framework of the Resilience and Recovery Plan. According to the plan the NPLs should not exceed 6% and the ratio of net NPLs minus provisions should not exceed 3%.

He noted that both of these indicators have been met, with rates at 5% and 2%, respectively. Therefore, said the Minister, “the Recovery Plan is proceeding as planned, and the government will make the most of the opportunities available”.

In his remarks, Keravnos also mentioned that the international credit rating agency Standard and Poor's has confirmed the creditworthiness of the Republic of Cyprus at the BBB investment grade and has revised its outlook from stable to positive.

He added that according to the rating agency “the new government appears to maintain stable fiscal surpluses in the coming years and that significant progress has been made in the banking sector regarding the reduction of Non-Performing Loans.”

He also said the Standard&Poor’s mentions the successful implementation of structural reforms within the framework of the Recovery and Resilience Plan as the key to the further development of the Cypriot economy.