The parliament gave two to three months time to banks to implement plans agreed with the Central Bank, for alternative solutions including discounts for borrowers who have loans in Swiss francs.
In case banks do not implement the plans adequately, the Parliament will proceed to legislative regulation. The plans are voluntary and provide a discount from 10% to 40% in case the loan is converted.
Speaking before the Parliamentary Committee of Finance, the director of the supervision department of CB Yiangos Demetriou, avoided to name banks but cited some details on their plans.
The plan of a specific bank, as Mr. Demetriou said without mentioning its name, is to convert loans from Swiss franc to euro or sterling.
It also provides for a 10% write off of capital, agreed euribor rate for 6 months and a margin to be agreed with the affected borrower as well as an extension of the loan to 30 years or 20 years for legal entities.
If there are no delays in the repayment of the loan then the bank will pay the 12th installment.
The conversion of the loan will be free of any charges, while for the first 12 months borrowers will pay only the interest and there will be no transaction costs.
If a full repayment is agreed, there will be a 20% discount on the loan, while in case the customer keeps their loan in swiss franc, repayment will be extended up to 30 years or up to the 71st year of the borrower.
Another bank’s plan provides for a conversion or repayment of the loan. Discounts will range from 20% -40%. There is also a provision for extending the loan without any cost to the customer.
The interest rate will be based on the provisions of the original agreement with a 1.75% margin.
Another bank, which does not have large amounts of loans in francs, offers a conversion of the loan in euro or sterling, with a debt reduction of 25%. Also, the rate of reduction will depend on collaterals or the borrower’s behaviour.
Then, the loan will be divided into two loans. One will be served and the other one will not be served.
The second loan will be interest free and the amount which is not served will be written off in five years.
An amount corresponding to 20% of the loan which is not served will be written off each year.
Banks’ plans will be voluntary and will address all kinds of loans.
In case banks do not implement the plans adequately, the Parliament will proceed to legislative regulation. The plans are voluntary and provide a discount from 10% to 40% in case the loan is converted.
Speaking before the Parliamentary Committee of Finance, the director of the supervision department of CB Yiangos Demetriou, avoided to name banks but cited some details on their plans.
The plan of a specific bank, as Mr. Demetriou said without mentioning its name, is to convert loans from Swiss franc to euro or sterling.
It also provides for a 10% write off of capital, agreed euribor rate for 6 months and a margin to be agreed with the affected borrower as well as an extension of the loan to 30 years or 20 years for legal entities.
If there are no delays in the repayment of the loan then the bank will pay the 12th installment.
The conversion of the loan will be free of any charges, while for the first 12 months borrowers will pay only the interest and there will be no transaction costs.
If a full repayment is agreed, there will be a 20% discount on the loan, while in case the customer keeps their loan in swiss franc, repayment will be extended up to 30 years or up to the 71st year of the borrower.
Another bank’s plan provides for a conversion or repayment of the loan. Discounts will range from 20% -40%. There is also a provision for extending the loan without any cost to the customer.
The interest rate will be based on the provisions of the original agreement with a 1.75% margin.
Another bank, which does not have large amounts of loans in francs, offers a conversion of the loan in euro or sterling, with a debt reduction of 25%. Also, the rate of reduction will depend on collaterals or the borrower’s behaviour.
Then, the loan will be divided into two loans. One will be served and the other one will not be served.
The second loan will be interest free and the amount which is not served will be written off in five years.
An amount corresponding to 20% of the loan which is not served will be written off each year.
Banks’ plans will be voluntary and will address all kinds of loans.
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