Background information

The Article 5 of the 'Emergency Measures Law for Financial Organizations and Supervisory Authorities' (2020) decided by the Cabinet, having regard the opinion of the Central Bank of Cyprus, provides the suspension of payments of credit facilities installments to financial organizations (i.e. Banks) up until the 31 December 2020.

The law covers all natural and legal persons, self-employed workers and businesses and concerns the credit facilities (including syndicated loans) given, purchased and/or are under the management of financial organizations

Content of measure

The eligibility criterion for the beneficiaries (natural and legal persons of public entities, self-employed workers and businesses) is that they do not have payment delays of their credit facilities of more than 30 days at the 29 February 2020.

The Law foresees a single process for the suspension of payment, which is the submission of a relative application form to the financial organization of the beneficiary through mail, email or fax. Financial organizations, according to the law, have no right to reject any application unless the applicant does not fulfill the payment delay criterion.

The suspension of payments includes also the taxes of loans. The taxes will be added to the sum of the outstanding loan at the end period of the measure. Payments and taxes, in addition, should not be payable after the end period of the measure unless the two parties agree differently. Instead, the repayment period of the loans will be elongated accordingly. It is noted that the terms of the loan contracts and all respective legal documents shall remain the same (except the repayment period) during and after the measure.

Use of measure

On 30 June 2020, the Central Bank of Cyprus provided the data on the suspension of payments up until the 8 May 2020. The total number of instruments is 76,057 of which 63,206 were households and 12,851 non-financial corporation. The total number of borrowers is 43,632 of which 38,327 were households and 5,305 non-financial corporations. As far as concern the amount suspended, the total number is €1,192,018 of which €360,225 households and €831,793 non-financial corporations. Finally, the total gross carrying amount of instruments is €10,152,556 of which €4,185,233 household and €5,185,233 non-financial corporations.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Applies to all citizens

Actors and funding

Actors	Funding
National government Social partners jointly Trade unions Employers' organisations	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Unknown	Unknown

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Peak or cross-sectoral level

Involvement

The government and the Central Bank of Cyprus jointly consulted the social partners - trade unions, employers' organizations and political parties.

Views and reactions

The outcome emerged is on an agreed base.

Sources

• 30 March 2020: Emergency Measures Law for Financial Organizations and Supervisory Authorities' (2020) (mof.gov.cy)
• 30 June 2020: Suspended facilities 30 June 2020 (www.centralbank.cy)