Cyprus Mail
BusinessCyprus

Hellenic withdraws favourable loans for staff

HELLENIC Bank will stop granting employees loans with more favourable terms than those offered to customers, it emerged yesterday.

The low-interest loans were part of the collective agreement bank employees’ union ETYK had negotiated on its members’ behalf, but the bank decided to cancel its contractual obligation with regard to several loan categories, the House Ethics committee was told.

According to the collective agreements, employees who belong to ETYK were entitled to seven types of loans with preferential terms for housing (up to €85,000 at a borrowing cost of 0.56 per cent), buying a car (up to €16,000), wedding (up to three monthly salaries), employing cleaners (up to four annual salaries) and general expenses (up to €17,000), all but the first type at 0.83 per cent. Bank employees were also eligible to apply for a student loan up to €35,000 at 0.97 per cent, as well as an interest-free loan to help them acquire the American Institute of Bankers diploma – up to €10,250.

In a memo to the Ethics committee, which was conducting an investigation into the root causes of the banking sector’s meltdown, Hellenic Bank explained its decision by citing the need to treat all customers equally.

“Fully recognising the public outcry and exemplifying its resolve for the equal treatment of all clients, especially in light of the March developments, Hellenic Bank took the bold step of unilaterally ending the provision of low-interest loans to personnel, despite it being a contractual obligation towards ETYK,” the memo said.

The union challenged the decision by submitting an appeal with the Labour ministry’s mediation services, which ruled in ETYK’s favour in December 2013 identifying a breach of labour agreements.

The ministry’s decision notwithstanding, the bank refused to change its position and announced “in every direction” that consolidation will be achieved by “substantive action and not peripheral declarations.”

Meanwhile, the Bank of Cyprus (BoC) has decided to withdraw from the Bank Employers’ Association (KEST) amid negotiations between the association and ETYK on a new collective agreement – the previous agreement having expired at the end of 2013.

The BoC has informed both parties of its decision, reportedly because the bank’s management does not wish to commit to any agreements between KEST and ETYK.

Considering that current challenges facing it in terms of its recovery differ immensely to those of other banks, the bank feels it needs to be allowed greater flexibility in dealing with labour issues.

Related Posts

BlackRock’s Fink says crypto technology still relevant despite FTX

Reuters News Service

Most companies employing ten or more, beef gear up for remote working

Source: Cyprus News Agency

Presidential candidates spar in second TV debate

Elias Hazou

Education ministry hits back at accusations of hostility against disabled children

Gina Agapiou

President lauds 30 years of Ombudsman’s office

Elias Hazou

Cyprus to receive first tranche of EU cash for reforms on Friday

Elias Hazou

2 comments

Comments are closed.