Cyprus Mail
Banking and FinanceBusiness

Cyprus banks strongly deny accusations of Consumer Association

Bank Basic

The Association of Cyprus Banks, along with other Cyprus banking sources strongly denied accusations of the Cyprus Consumer Association made on Thursday.

The Consumer Association claimed that Cyprus banks are not providing sufficient information to consumers who have nine-month suspensions of loan payments, and that unfair rates of interest are being charged on these instalments.

A spokesperson for the Association of Cyprus Banks told the Cyprus Mail that there was no truth to either of these accusations. Other banking sources concurred, and said that banks are subject to strict compliance as regards providing information to consumers.

By mid-June 2020, a total of 50,586 applications for suspension of instalments were submitted (for households and businesses), and this  which corresponds to the total amount €1.37 billion.

In a statement published via the Cyprus News Agency, the association calls this “unfavourable treatment.”

“As mentioned, on April 5, 2020, the Association, on the occasion of the enactment of law 33 (I) / 2020 and the issuance of Decree KDP 134/2020, in a public announcement, argued that the nine-month suspension of instalments creates serious additional financial obligations to consumers and called on consumers to be informed of the additional costs they will incur before applying for a dose suspension. At the same time, he called on banks to inform consumers about the real additional costs that will be borne.”

Banking sources pointed out that rates of interest charged to consumers on loans that are suspended are determined by the loan contracts agreed upon with the bank. Consumers are not being asked to pay other charges; what’s more, they benefit, after the suspension is over, from a full nine-month period to pay their loans.

All consumers were provided with extensive information about the execution of their loans when they signed the loan contracts, as well as when applying for extensions. Further, consumers may, at any time, request any information they require from the banks, the sources said.

 

 

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