Cyprus Mail
Cyprus

Banks accused of bullying borrowers into new loan terms

THE spokesman for an association of borrowers said yesterday that banks and co-operative institutions were bullying people into restructuring their loans. 

Costas Melas told state broadcaster CyBC he had already forwarded to the Central Bank an unspecified number of cases relating to banks allegedly bullying borrowers.

“They [the banks] are terrorising them.”

He said that clients were threatened with court action if they did not immediately agree to new bank terms.

“Banks should act honestly and in good faith and show understanding, explaining the reasons behind their proposals but it seems all of that is part of the fine print,” Melas said.

A spokesman for the banks’ association Giorgos Georgiou told CyBC that it was in the banks’ interests to support clients’ ability to respond to their loan obligations and restructuring loans were done within that spirit.

The island’s second biggest lender was shut down in March as part of the terms of an international bailout while the biggest, the Bank of Cyprus, was recapitalised using a large chunk of depositors uninsured savings. Even before the bailout, several bondholders had accused the banks of duping them into buying high-risk bonds without explaining the risks. Several have sued taken legal action against their lenders.

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