Banks in Cyprus draft individual relief measures for borrowers

Banks in Cyprus are drawing individual relief measures for borrowers in view of the European Central Bank’s ongoing policy to raise interest rates significantly at a steady pace.

This is what Philenews reported on Wednesday, following a meeting of Finance Minister Makis Keravnos with top ranking executives of commercial lenders.

Apparently, for legal purposes related to competition, the possibility of horizontal relief measures by all banks – along the lines of the model applied in Greece – is off the table.

It is also obvious that despite government pressure exerted on banks the commitment that thousands of borrowers expected has not been secured.

That is, a freeze on interest rates for serviced mortgage loans up to €350,000, as was the Minister’s initial appeal to bankers. Keravnos was told that there cannot be a uniform solution for borrowers, either because competition issues are affected or because each bank’s housing portfolio has different characteristics.

The top executives have pledged, however, that each bank will present its own customer relief plan by the first ten days or fortnight of May.

The plans will have to get approval from the supervisory authorities in Cyprus and Frankfurt where the ECB headquarters are.