BUSINESS

Banks to put pressure on strategic defaulters

YIANNIS PAPADOYIANNIS

TAGS: Banking

Banks are putting an end to the informal immunity granted to strategic defaulters, switching their tactics to the more active pursuit of dues. Tackling the problem more efficiently could fetch hundreds of million of euros in liquidity.

Certain banks are already terminating loan contracts that are more than six months behind, unlike the previous practice of waiting until payments were more than 12 months late.

Senior bank officials tell Kathimerini that a loan contract termination will from now on be followed by all steps provided by law until the end – i.e. auctions. To date banks would delay or avoid terminating loan contracts, and even after doing so would not implement any of the necessary actions.

Banks acknowledge their share of the blame for the rise of strategic defaulters, as in their way lenders contributed toward the impression debtors could simply get away with not paying. This concerns more or less all borrowers, from small and large business loans to consumer and mortgage credit.

Bank officials estimate that strategic defaulters – i.e. those who deliberately avoid paying their dues even though they can – may amount to 25 percent of all debtors. Bank of Greece sources put that rate at between 15 and 20 percent.

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