The House Finance Committee decided to set up an ad hoc committee to examine 13 different foreclosure bills with the main aim of finding a common approach on the issue, which is currently seen as the biggest obstacle. to faster and fairer restructuring.
At the same time, committee chairperson Christiana Erotokritou said on Tuesday that the Central Bank and the Association of Banks were leaning towards accepting a request for further suspension of foreclosures on certain categories of loans until July 31, 2021.
In December, MPs passed an amendment to the law extending a previous freeze on foreclosures. The current expansion ends this month. The main opposition, Akel, proposed that it be extended until the end of July. The proposal concerns main residences valued up to € 350,000, business premises valued up to € 150,000 and agricultural land valued at € 150,000.
“We are very happy,” said Erotokritou, not only because it would give the finance committee more time to settle the matter in the right way, but because the aim is to find the right restructuring mechanism, not to lock.
“The goal is not sale, the goal should be restructuring, and the main reason we don’t have the number of restructurings we all want is the dispute between credit institutions over balances because there is a difference in approach to issuing over-indebtedness, ”she added.
“For this reason, the finance committee sets up an ad hoc committee where all the proposals will be grouped together and a mechanism will be found so that the restructuring and not the sale can take place with the agreement of both parties,” he said. -she adds.
Akel’s party spokesman Stefanos Stefanou expressed satisfaction, saying there was a good chance the extension would be approved due to the ongoing pandemic.
He also said that it would be beneficial during the discussions in an ad hoc committee to formulate joint proposals so that they can be submitted to the plenary for a vote as soon as possible.
“Changes are needed in areas such as unfair terms and bank overdrafts, loan balances, granting the right to legal aid and debtors’ free access to justice,” he said. .
The government, central bank and foreign organizations have already warned of a constant prolongation of the stay on foreclosures, saying it would further strengthen the weak repayment culture and impact lenders’ capital and bad debt provisions. .
It could also prompt rating agencies to downgrade Cyprus to non-investment grade, which would prevent the island from borrowing in international markets.
At a previous meeting of the House finance committee, the central bank said 80.6% of non-performing loans with primary residences worth up to € 350,000 as collateral were past due. for more than 180 days. Of these, 34 percent were overdue between one and five years, while 31 percent were overdue between five and ten years.
NPLs with arrears of more than 10 years reached 15.6 percent.