The “green light” for the suspension of installments to financial institutions was given to the Ministry of Finance by the Central Bank of Cyprus (CBC).
A relevant announcement states that the CBC “continues to monitor the developments in the economy with full awareness of the negative consequences of the pandemic”. In order to mitigate these effects on businesses, households and the banking sector in order to safeguard and enhance the country's financial stability, the CBC has decided to give its assent, through its Board of Directors to the Ministry of Finance, for the suspension of installments to financial institutions within the framework permitted by the Guidelines of the European Banking Authority (EAT).
The Guidelines were approved by the Board of Supervisors of EBA, in which the CBC participates, it is added, while it is stated that based on the relevant law, the decree will be issued by the Minister of Finance.
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“The suspension of installments is aimed at supporting the liquidity of businesses and households that will face the biggest short-term liquidity problems due to the pandemic. At the same time, sensitive categories of borrowers will be supported, whose obligations are secured from their first home with a market value of up to € 350 thousand “, it is noted.
The CBC has also decided to extend until March 31, 2021 the measure announced in March 2020 for easier and more immediate provision of short-term loans by banks to businesses and households to meet the current financial difficulties. Specifically, it is reported, the CBC maintains the easing of the criteria for granting new short-term credit facilities until March 31, 2021, in order to help the affected businesses and households immediately gain the liquidity they need to meet their current liabilities.
The criteria, which are relaxed, concern the way of assessing the repayment capacity and the evidence should be provided by the borrowers to the banks, aiming at the faster processing of procedures by the banks.
The CBC assures that it will continue to monitor developments and exercise its responsibilities in order to safeguard and further strengthen the country's financial stability.