BUSINESS

Bank association demanding changes to settlement bill

TAGS: Economy

The Hellenic Bank Association is asking for changes to the bill on the extrajudicial settlement of debts to lenders, warning it could turn into a refuge for strategic defaulters.

Bank officials note that unless some modifications are made the new mechanism will torpedo the effort to reduce nonperforming loans, which would have dramatic consequences on the banks’ capital base.

The HBA has already sent a letter with its request to Economy and Development Minister Dimitris Papadimitriou.

HBA General Secretary Hariklia Apalagaki warns in an article in Kathimerini that certain clauses have been inserted into the bill which will, unless they are removed, turn the law into another protection instrument for strategic defaulters.

The HBA is requesting five key changes: that the new mechanism only be used for corporate loans (and not mortgages etc as provided for in the bill), that the minimum debt amount be raised to 50,000 euros (from 20,000 euros), that objective criteria be introduced to establish the liability of people involved in the settlement, that the application of the mechanism begin after the online application system is ready, and the abolition of all court processes for ratifying the settlement’s details.

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