MPs hope for swift passage of bill to see some money returned to Laiki depositors

Lawmakers said on Monday they hoped for swift passage of a bill that would fast-track the return of at least part of the moneys legacy Laiki’s depositors lost in the 2013 bail-in.

The legislative proposal – jointly authored by Akel’s Irini Charalambidou and Diko’s Chrysis Pantelides – apparently has the backing of all the parties, as well as the finance ministry and the Central Bank. As such, legislators intend to take the bill to a vote at the plenum soon, and before the summer recess.

The bill effectively amends the bankruptcy law, so that with a court’s permission different procedures may apply in compensating creditors of an insolvent company.

In the case of ex-Laiki’s depositors, seeking to recoup some of their lost savings, they’d be able to be represented en masse by the bank’s liquidator – rather than each one of them having to file a sworn statement with a court and then send registered letters to the liquidator, as is currently the case.

As things stand now, the liquidator would have to hire staff to process the some 14,000 applications by legacy Laiki’s depositors. This would take too long.

Instead, under the new arrangement being proposed with the bill, the bank’s liquidator would set up an online platform where the depositors will login and enter their ID number and bank account information. Once the. process is complete, any refunds would be made automatically to their bank account

Whereas authorities already have the data on how much money each ex-Laiki depositor lost, the platform would bring all the information in one place, speeding up the process.

Speaking in parliament, Charalambidou said her legislative proposal aims to finally give something back to the failed bank’s depositors, nine years after their savings were wiped out in the ‘haircut’.

Nine years after the fact, a liquidator has yet to be appointed for Laiki – also known as Popular Bank. The entity is still under administration. Meanwhile the bank’s assets have declined over time.

Head of the Laiki bank depositors group (Sykala) Adonis Papaconstantinou said that the bill, if passed, will bring forward the liquidation process for Laiki, “which we hope will finally start.”

He thanked the MPs for their initiative.

According to Papaconstantinou, Laiki’s assets are currently worth anywhere from €200 to €230 million.

Dividing this amount by the ‘haircut’ depositors would work out to each depositor getting back a mere 4 per cent of the savings they lost – “peanuts,” as he put it.

He mentioned that the total savings suffering a ‘haircut’ came to €3.2 billion.