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New lending criteria could possibly shock borrowers

03 December, 2013

The new lending criteria could possibly shock borrowers, President of the Association of Cyprus Banks, Marios Clerides, has said.

The introduction of new lending criteria is included in the Memorandum signed with the international lenders -ECB, IMF and European Commission- Clerides said on Tuesday, adding that these criteria will be put in place as soon as consultations are concluded.

“Loan approval criteria should have existed in the past” President of the Association of Cyprus Banks said.

“Now we are moving on to a much stricter environment, which in the long term might prove to be more right. I am not sure if these criteria would cause an immediate shock to the borrowers” he noted.

The banks, he said, will be asking for various certificates and documents related, inter alia, to income tax and cash flows.

Clerides noted the lack of liquidity in the banking sector and the lack of public confidence in the banks.

He also called on the state not to make decisions without measuring their impact on the banking sector, referring especially to regulating interest rates via legislation.