Over 7,000 applications to suspend loan payments

Applications to suspend repaying loans in Cyprus have exceeded 7,000 after the government announced a nine-month freeze as part of emergency measures to mitigate impact of the coronavirus epidemic.

Parliament approved a law for taking extraordinary measures at financial institutions and regulatory authorities and the Finance Minister issued a decree calling for a moratorium on loan instalments for nine months.

These measures were introduced after the European Banking Authority gave clarifications, namely that loans subject to a payment moratorium, cannot be considered as non-performing.

According to data gathered by CNA from the island’s two largest banks, applications so far have exceeded 7,000, with no data concerning the total value of these loans.

Sources from the Bank of Cyprus, the island’s largest lender told CNA applications have surpassed 5,000 with a rising trend.

Sources from Hellenic Bank said the bank has processed more than 2,000 applications with nine out of ten applications being eligible for a loan instalment freeze.

Both banks clarified that loan suspension begins end-of-March, following the approval of the law, irrespective of the date of the application’s submission.

The banks intend to return money in case of instalments paid before an application is submitted.

According to the Finance Minister’s decree, eligible borrowers are natural persons, public organisations, self-employed and companies which had no arrears over 30 days on 29 February 2020. (source CNA)