The Central Bank of Cyprus (CBC) has amended its directives on the release of loan collateral upon repayment and the cost of valuations during loan restructuring, with the changes published in the Official Gazette and entering into force immediately.
The amendments form part of the regulatory framework governing credit institutions’ operations, capital requirements, and prudential supervision.
Collateral release
Under the updated directive, collateral securing a loan must be released immediately upon full repayment. Where applicable, the title is returned to the borrower or the collateral holder.
An exception applies to mortgages on immovable property, for which the timelines set out in the Immovable Property (Transfer and Mortgage) Law continue to apply.
The provision does not apply where the mortgagor has given written consent to the mortgage not being discharged. If that consent is later withdrawn in writing, the lender must discharge the mortgage within the statutory timeline provided for in foreclosure legislation, calculated from the date of the written withdrawal.
Valuation costs
The amended directive also changes the rules on valuation costs during loan restructuring. Any costs arising from valuations carried out as part of the review of existing credit facilities are to be borne by the credit institution, unless the loan agreement specifies otherwise.
Electronic money
The CBC also published a new Electronic Money Directive in the Official Gazette on the same date. The directive sets out governance requirements for electronic money institutions, including frameworks for internal governance, risk identification, management, monitoring and reporting — covering compliance risks as well as exposure to money laundering and terrorist financing.