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19 July, 2024
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Lifeline as Parliament accepts President's referral

Stakeholders agree to seek a different formula for foreclosure legislation


The House of Representatives has heeded warnings voting to accept the President's referral of legislation that would have made it difficult for banks to recover mortgaged non-performing exposures.  

At a plenary session 27 MPs voted in favour with 23 voting against. A second legislative referral receive 48 votes in favour.

Finance Minister Haris Georgiades prior to the vote said that accepting the referral will allow for sufficient time for the DIKO proposal to be seriously considered and evaluated by the Central Bank of Cyprus in order to obtain an opinion from the European Central Bank.

''We respect MPs concerns about finding a way for borrowers to seek justice but it should not be a mechanism that delays banks' efforts and affects financial stability'' said Central Bank Governor Constantinos Eracleous.

Following warnings by the ECB and in an effort to reach a consensus that would allow banks to tackle NPEs, DIKO presented a proposal which gives the Financial Ombudsman increased powers and jurisdiction to act as an intermediary between banks and borrowers.

The DIKO bill was voted into law on Friday.

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