REVISED CODE OF CONDUCT FOR THE MANAGEMENT OF NON PERFORMING PRIVATE BANK LOANS (“RED LOANS”), AUGUST 2016

The Bank of Greece decision which revised and completed the Code of Practice for the management of non-performing private bank loans issued by authorization of L.4224/2013 (Government Gazette 288/A/31.12.2013) has been published in the Government Gazette (GG 2376/B/2.8.2016, http://www.bankofgreece.gr/BoGDocuments/ΕΠΑΘ%20195_1.pdf )

In the revised Code of Practice, among others, its scope is further specified and procedures concerning individuals, very small businesses and other businesses are clearly defined, special notice is taken regarding socially vulnerable groups and special provisions are included regarding cases of loans with multiple lenders.

The provisions of the revised Code of Practice are applied by all supervised institutions which are granting any type of credit in Greece based on point 1 and 22 par. 1 of article 3, par. 2 of article 9 and articles 34, 36, 38, 41 and 43 of L. 4261/2014 including the branches of foreign Credit Institutions, financial institutions within the meaning of point 22 of par. 1 of article 3 L.4261/2014 and the Companies of article 1 L.4354/2015 as applicable.

The Code of Practice pertains to the handling and the procedures to be followed by the Credit Institutions in cases of borrowers who are in default on their debts, by specifying the steps to be taken on this occasion. The Credit Institution applies to the debtor the structured -and compulsory – process of resolving payment delays, on the basis of which within certain time limits requests the financial data of the debtor, and following their analysis they seek jointly appropriate solutions to the effect that the debtor remain consistent in debt obligations on the basis of its financial capacity which might have change significantly and there is a need for structural adjustment. For this reason, Annex II of the Code of Practice contains indicative appropriate solutions for the impairment and extension of the loan repayment. To regulate or reduce the financial obligations the debtor should cooperate with the Financial Institution, respond to specific requests provided by Law and, conforms to calls by the Financial Institution   to resolve faster its problems.

The full text of the Code of Practice is published on the website of the Hellenic Bank Association http://www.hba.gr  at http://www.hba.gr/Main/KD/KodikasDeontologias_FEK%20_B_2376.pdf

Sources: Bank of Greece, Hellenic Bank Association

 

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