Banks fret over new debt rules

Banks fret over new debt rules

Greek banks have asked Deloitte to assess the impact that the bill on debt arrangement and second chance measures will have on nonperforming loans in the context of the public consultation of the draft law lasting till September 10.

The consultancy is mandated to perform an impact analysis, focusing on the bill’s clauses regarding the out-of-court settlement of debts for individuals, given the reservations banks have on the matter.

To date, the extrajudicial arrangement of debts is only for enterprises and freelance professionals, concerning their debts to the state. The online platform for that purpose will now also open up to individual debtors, offering them solutions before they are forced to file for bankruptcy in court. This will even apply to reliable borrowers and the procedure is voluntary (i.e. not binding for creditors).

Banks are worried that this provision will lead to numerous debtors resorting to out-of-court settlements, even those hitherto consistent in meeting their loan obligations but unable to pay all their taxes. The bill allows for debt haircuts and payment extensions, as claims can be settled in up to 20 years.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.