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SYROPRODAT: Addressing the informal economy through a bill for abusive clauses

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SYROPRODAT: Addressing the informal economy through a bill for abusive clauses

The President of the Association for the Protection of Borrowers (SYPRODAT), Costas Melas, characterizes the treatment of Non-Performing Loans (NPLs) as the main challenge of the Cypriot economy in 2021, while emphasizing the need for an effective response to the informal economy.

At the same time, Mr. Melas refers to the goals of SYPRODAT for 2021, which are, among other things, the passing of a law on the multi-bill for abusive clauses and the legislative regulation of the issue of appointment by the Recipient / Administrator Banks.

Specifically, in an interview with KYPE, the President of SYPRODAT stated that in addition to dealing with MES, “at the same level of severity, the correct and sensible financing of companies is promoted in order for the economy to start moving”.

“The key players in this effort, (Banks and Borrowers) must responsibly work together in good faith to find solutions that will leave both sides satisfied,” he said.

He said the banks, weeks before the suspension expired, began contacting borrowers trying to address their problems.

“The messages we received from the two main banks (Bank of Cyprus and Hellenic) are encouraging. “The solutions publicly announced by their leaders are realistic and well-designed and we believe they will help borrowers,” he added, noting that a liaison will stand by the banks in this effort.

He added that “the clear urges of the Central Bank to carry out an increased number of restructurings greatly enhance the whole effort.”

At the same time, the President of SYPRODAT said that the informal economy should be tackled effectively and stressed that “the prevention of money laundering should be such as to make this criminal activity unattractive”.

The current legal status provides a sound basis for tackling this problem effectively, he added.

Suspension of sales

Regarding the suspension of sales with the law recently passed by Parliament, Mr. Melas explained that “this is a temporary suspension until the end of March 2021 and not a modification of the current legal framework for private sales that remains intact.”

“Certainly a quick and effective collateral legal framework is essential for modern economies, as it boosts trade and transactions in general,” he said, adding that “this framework prevents strategic defaulters and strengthens compliance with the loan repayment schedule.” In addition, it motivates and rewards conscientious Borrowers. “

According to Mr. Melas, the association's suggestion is the temporary suspension of all sales. “This suspension in the midst of the pandemic that no one can predict how it will develop, will not affect the Banks given the satisfactory level of their capital adequacy,” he stressed.

In addition, he continued, European supervisory authorities have given banks additional leeway to absorb any damage caused by the pandemic.

An additional advantage of their suggestion, according to the President of SYPRODAT, “is that it will force the Banks to deal rationally with the handling of NPLs, starting with the effort for proper and sustainable restructuring”.

He also stated that this is required by the relevant law that imposes this obligation on banks with the letter type “I” and added that the sale is the last measure when all efforts fail.

“Unfortunately, the opposite is true. Sales do not solve the problem of NPLs. as everyone admits “, he noted.

Goals for 2021

Moreover, Mr. Melas told KYPE that the goals of SYPRODAT for 2021 are to pass a law on the polynomial bill for the abusive clauses for which we are preparing, as he said, “to submit written proposals, which include extension of protection to legal faces”.

He added that other objectives are the legislative regulation of the issue of appointment by the Recipient / Administrator Banks through floating charge bonds and the voting in law of the proposal for appointment of an Arbitrator, who will decide on the amount of obligations within 30 days, which is not does not affect the time frames of the current law at all.

Philenews / ΚΥΠΕ

Source: www.philenews.com

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