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Jobless BoC customers need only pay €10 a month mortgage

BoC chairman Christis Hasapis

By George Psyllides

UNEMPLOYED Bank of Cyprus (BoC) borrowers will not have to pay their regular instalment for a year on housing loans, the lender announced on Friday.

BoC chairman Christis Hasapis said unemployed borrowers will pay the token amount of €10 per month, instead of the normal payment.

And that can be cut by half if the customer cannot afford it, the bank said.

“In this way the mortgages of the unemployed will be considered ‘performing loans’ and all of these people will be able to sleep better at night,” Hasapis said.

The arrangement can be extended if the customer remained unemployed for over a year.

The maximum duration of the scheme was three years, Hasapis said.

The lender said it would continue to help customers, even after they have found a job by allowing them to just pay the interest rate on their loans for an extra 12 months.

However, Hasapis said, from the moment an instalment was reduced, future payments would be higher.

If the value of the mortgaged property was under €250,000, then the interest rate on the housing loan could be reduced by up to 2.0 percentage points but not under 3.75 per cent, Hasapis said.

This measure will be in effect for two years.

The BoC chairman said the scheme would come into effect immediately, and was part of the lender’s measures to support its unemployed customers.

Asked about the large borrowers who owed the bank some €6.0 billion, Hasapis said BoC would find ways to collect its money.

A list of 30 large borrowers has been doing the rounds in recent days.

“We are starting from the large ones (borrowers) and that is why you have seen this list of 30 people. They are people who owe over €100 million,” Hasapis said.

He said some have started selling properties voluntarily to pay off the bank.

“We think the bank is on the right path and we also think the entrepreneurs who owe this money will find the proper ways to pay the bank,” Hasapis said.

BoC is reeling after a Eurogroup decision to seize depositors’ cash to recapitalise the lender.

The decision also called for the closure of the island’s second biggest bank, Laiki.

“This was an experiment in economics on an economy that was small enough to be experimented on by a federation,” said BoC CEO John Hourican. In an interview with British daily The Independent, Hourican said if the experiment failed “the damage to the economy is extreme but the damage to the EU is not. The bail-in has removed the one thing the Cyprus banking system needs and that is confidence.”

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