Central Bank of Cyprus announced Monday that credit institutions are obliged to inform and explain adequately to borrowers experiencing financial difficulties, their rights and obligations during the procedure of management of delays and loan restructuring.
According to the Code of Conduct on the Handling of Borrowers facing financial difficulties, the CBC expects and demands all credit institutions to take into account the financial realities of their customers, acknowledging that customers who are experiencing financial difficulties are in a particularly difficult position and that they depend on the credit institution to assist them during this difficult time.
CBC also notes that it is very important, for the borrower, once approached by a credit institution, to provide all necessary information requested.
It also stresses that all credit institutions should communicate in time with borrowers who are experiencing financial difficulties and consult in a positive spirit and a constructive way and to make continuous dialogue with borrowers in order to reach a mutually acceptable restructuring solution.
In late March Cyprus averted a collapse of its banking sector after agreeing on a €10 billion bailout with the Troika (EC, ECB and IMF), that featured a haircut of banking deposits over €100,000 in its two larger lenders and an array of public spending cuts and salary reductions.
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