Applications which had received substandard handling by banks will be included in the Hestia project, said Finance Minister Constantinos Petrides, who spoke of bad practice by banks, adding that this issue will be discussed with the Association of Banks.
In statements after the Cabinet meeting on Wednesday, Mr. Petrides said that one of the main criteria for inclusion in the Hestia plan for NPLs and protection of primary residence is that the loans were non-performing as of both July 30, 2017 and June 30, 2019.
He added that in cooperation with the Ministry of Labor, the Ministry of Finance has reviewed all completed applications and what has been found is that there are a number of applications in which restructuring was preceded by terms that initially required the payment of a very low installment, in the order of a few tens of euros, which did not cover interest or the principal installment and which increased significantly, multiplied as he said, after September 30, 2017.
"So these loans at the beginning were non-performing and were not included in the plan under the provisions and what was pointed out though is that this restructuring was rudimentary, and phenomenal, it was a bad practice of the banks and provided for the payment of a very low tranche during September 30, 2017, while the possibility of servicing afterwards when the tranche increased was unfeasible," he said.
Petrides said that therefore the Cabinet today decided that these applications, which received a substandard, unsustainable and apparent restructuring due to a bad practice of the banks, would fall under the Estias plan, despite the fact that they had been rejected because the loans were considered serviceable on the material date.
"I want to call on banks, and we will discuss this issue with the Bankers Association in the coming days, to exercise uniform treatment for other cases of those who did not apply," he said.
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