According to information, Finance Minister Christos Staikouras is exerting pressure on banks and servicers in order to increase volume of loan arrangements through both out-of-court settlements and bilateral agreements.
However, despite the fact that the percentage of loan adjustments has increased significantly recently, the final number of adjusted loans is far from the desired final amount, according to the Ministry of Finance.
This dissatisfaction was conveyed by the Ministry of Finance, in a meeting held yesterday, and banks and servicers were asked to pick up the pace so that on the one hand the goals are achieved and on the other the out-of-court settlement law fulfills its mission.
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According to relevant information, the Ministry of Finance and the Private Debt Management Secretariat presented detailed data, confirming the government’s position.
The only “sound path”
According to information, banks and servicers are not showing particular zeal in regulating loans through the out-of-court procedure and this is because they believe that if they enter this process, the “haircut” rates may be higher than what they have factored and for this reason they are low on the options list.
On the contrary, in the Ministry of Finance, they believe that out-of-court settlement and bilateral agreements are the only sound path to settling non-performing private and avoiding unpleasant options such as, for example, auctions, an option allegedly favored especially by banks and servicers.
Percentages
According to the data collected by the responsible Secretariat, banks proceed to reject arrangements, either through extrajudicial or bilateral agreement at a rate of 67%, while the corresponding rate for servicing companies is 34%.
It should be noted that based on the out-of-court settlement, the installments for debts to the public amount to 240, while for debts to the banks it can even reach 420 installments.
However, information indicates that the Ministry of Finance appears determined to take all those initiatives that will put the whole process on track. In this context, it is expected that next week there will be an official update on the course of the out-of-court settlement procedure, while the possibility of the matter reaching Parliament should not be ruled out.
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