ECONOMY

National Bank comes up with aid

National Bank, the country’s largest lender, will put the brakes on homes being auctioned due to default loans and give unemployed mortgage holders some slack as part of efforts to support low-income earners and small businesses, it said yesterday. The country’s banks have been accused by the country’s top political leaders of adopting excessively tight lending practices that are taking a toll on the economy even after being offered a 28-billion-euro state rescue plan. In what National Bank described as being the «first set of measures,» customers defaulting on mortgage loans worth less than 300,000 euros will not see their first homes go under the hammer for six months. Additionally, unemployed customers can put off paying monthly home loan payments for a year, while a new 100-million-euro fund to finance small and medium-sized businesses will be launched. «National Bank will continue the smooth flow of finance toward businesses and households, making use of its liquidity and supporting the national economy,» the bank said in a statement. The plan comes in response to comments from Development Minister Christos Folias who earlier said National Bank and other lenders are being investigated for adopting «abusive practices.» According to the minister, consumers have filed complaints against lenders for upping credit card interest rates and charges without previously informing them. The European Central Bank reduced its key interest rate by half a percentage point to 3.25 percent yesterday. The conservative government’s bank rescue plan aims at helping to boost liquidity and capital to lenders on the condition the state has a say in their management. A number of lenders have turned down the invitation, saying that they have no need for the financial assistance but have since drastically cut down on the loans issued and upped interest rates, particularly in commercial credit.