Representatives from banking institutions and the Credit Acquisition Companies Association appeared before the House Commerce Committee to discuss the challenges faced by borrowers due to successive increases in interest rates.
Michalis Kronides, representing the Association of Cyprus Banks, stated that banks have already taken several measures to support borrowers affected by rising interest rates. He also stressed that more actions are expected in the coming weeks.
Bank representatives highlighted new products they offer to their customers, such as fixed-rate loans.
They pointed out the difficulty in reducing interest rates, as deposits in Cyprus outnumber loans. A representative from the Credit Acquisition Companies Association noted that loans purchased by companies are governed by the same contracts as those held by borrowers with banks.
Borrowers, speaking before the committee, criticised the banks’ plans as inadequate to address the surge in interest rates. The Credit Acquisition Companies Association expressed concerns about borrowers who, despite servicing their loans, struggle to meet their repayments due to stagnant wages.
The committee members called on banks to take substantial measures to support borrowers.
Committee chair and Disy MP, Kyriakos Hadjiyiannis, accused banks of putting profit first.
On his part, Akel MP Kostas Kosta highlighted the issues borrowers face due to high interest rates and announced that his party would propose legislation to tax banks and provide assistance to borrowers.
Stavros Papadouris, a representative of the Green Party, mentioned that small banks have absorbed the cost of high-interest rates, while larger banks have not.
Representatives from the Central Bank and the Ministry of Finance are expected to provide further insights in an upcoming session of the Committee.
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Cypriots borrow at higher rates, get less for deposits than EU counterparts