Bank of Cyprus customers have expressed strong interest in taking part in the ‘Estia’ Scheme which provides support to vulnerable borrowers and contributes to the deleverage of non-performing loans of banks. This special scheme was announced by the government and has been approved by the European Commission for Competition.
According to BoC data, a letter informing on the ’Estia’ Scheme was sent out to 4,320 customers, with a total of 3,790, so far, responding back – that is, 87% of the letter’s recipients. So far 2,980 borrowers have already expressed interest in taking part in the Scheme, accounting for 68% of the total or 78% of those who have been contacted by the Bank.
The remaining borrowers are either not interested in ‘Estia’ since they have opted for another solution to settle their debts, or they have been scrapped as potential candidates after a study of their loan data showed that they did not meet the basic criteria for participation. A third reason is that the Bank has been unable to communicate with them.
The Bank estimates that the total number of candidates according to the plan’s specifications can rise up to 5,000 customers. There is also the case of customers who contact the Bank themselves and after a review as well as an update of their data it appears that they too meet the basic criteria before joining the plan. The Bank of Cyprus has the lion’s share of borrowers who will be able to make use of the provisions of ‘Estia’ Scheme, with the value of loans being at €1 billion.
Among the criteria borrowers have to meet before participating in ‘Estia’ is that they must have been permanent residents in the Republic of Cyprus over the last 10 years. In addition, the scheme is available to those borrowers that have non performing facilities as of September 30, 2017. These non performing facilities, mortgaged on their primary residence, must continue to be non-performing until the date of application submission. At the same time, the market value of the primary residence shall not exceed €350,000.
The scheme excludes loans that have been restructured by September 30, 2017 and thereafter. In order to remain in the scheme, the borrower should be consistent with the terms of the restructuring agreement with his bank.
The House of Representatives proceeded this week with the release of a €33 million budget for ‘Estia’.
Read more: House Finance Committee releases Estia funds