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Cyprus

Bills to protect rights of bank customers

A bill regulating unfair bank charges, which is aimed at protecting borrowers, and a bill on the solvency of insurance companies are to be tabled at the House plenum on Thursday, it was announced on Tuesday.

Speaking after a meeting of the House Commerce committee, its chairman Zacharias Zechariou said the bill on bank charges “creates a framework of trust between the banking system and the borrower by calculating the interest payment of loans at 365 days instead of “the previously followed technique, which was at 360 days”.

Secondly, he said, the bill will prohibit charges not provided for in contracts, and thirdly the discontinuation of the loan agreement without any reason given by the banks will no longer be allowed.

He added that efforts are being made to set regulations on how the banking system should operate, as well as clear rules to create trust.

AKEL MP Yiannakis Gavriel said as regards unfair bank charges, his party is preparing a new bill “because the Association of Cyprus Banks cannot understand that if the borrowers’ confidence is not restored, there will be no banking system”.

He added that that his party will wait to see whether banks will abide by the new (to be voted) legislation, and then it will propose new bills, as “sadly, the Finance Ministry is trying to protect the banks and not the borrowers”.

On solvency rules for insurance companies Zachariou said the bill is aimed at the harmonization of national legislation with the relevant EU directive regulating the insurance industry, and the calculation of reserves of insurance companies so that the insured will be certain that there are adequate funds.

Zachariou said this bill needs to be passed by April 11.

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