The Cyprus Cooperative Bank on Friday froze accounts of customers who keep their loans delinquent on purpose, as the bank makes an effort to force them to seek refinance terms.
According to Kathimerini Cyprus, CCB on Friday froze accounts with deposits over €2500 in cases where owners either have delinquent loans or have defaulted on their terms causing the bank to have an unresolved Non-Performing Loan (NPL).
The move is not connected to the recent deal with Hellenic Bank taking over the healthy part of the CCB, according to sources within the bank.
On the contrary, those sources said the freeze was in the works for some time and it was scheduled to be rolled out in the near future.
But it appears that the Hellenic deal accelerated the process.
The bank says irresponsible depositors have been avoiding any effort to work together with the bank officials to agree on new loan repayment terms.
In some cases, delays have gone for many years according to bank sources, in what has become to be known as “strategic defaulters” in Cyprus.
This comes one day following the publication of a 2017 report by ESM, which identified key problem areas for Cyprus’ banking sector despite banks having at their disposal necessary legal tools to reduce NPLs.
Now loan defaulters and those who have delinquent accounts will be forced to contact the bank in order to unfreeze their accounts.
The bank reportedly said the best solution would be finding common ground.