The measures for the protection of vulnerable borrowers, the enhancement of transparency in informing borrowers by servicers, and the strengthening of competition within the banking system are provided for in the draft law of the Ministry of National Economy and Finance, which was open for public consultation until Wednesday, November 22.

INTERVENTIONS

1. Obligations of transparency, information, and respect for the rights of borrowers regarding servicers. Specifically, the provision of personalized and detailed information to borrowers by servicers becomes mandatory, including details on the amount owed, payment history, installments, interest rates of the settlement, etc.

This information should be provided through a dedicated digital platform (similar to the web banking of banks), updated at least on a monthly basis, and should be operational no later than March 31, 2024. Penalties are also stipulated, ranging from fines up to €500,000 to the revocation of the operating license for companies that do not comply.

2. Modernization and improvement of the extrajudicial mechanism. The proposal for debt restructuring by vulnerable debtors should automatically be accepted by all creditors. The debtor retains the right to reject the proposal, while creditors can challenge it in court if they have evidence that certain parameters of the application are untrue. Additionally, for all debtors with loans secured by collateral, the algorithm determining the amount of debt write-off and settlement through extrajudicial means is improved.

This regulation, which will be implemented through ministerial decision after the law is passed, leads to a reduction of up to 28% in the regulated debt from collateralized loans. Finally, in the same manner, the interest rate for settlements will be fixed at 3% for 3 years, and the possibility of inclusion in the extrajudicial process is extended to individuals who have "inherited" debts to the Public and Social Security Organizations, which have been certified against closed businesses, through the completion of the application and the immediate issuance of the relevant ministerial decision.

3. Regulations to enhance competition, such as the granting of loans by non-banking entities, are introduced. A regulation is being implemented, allowing Credit Servicing Companies (CSC) to provide housing or business loans in addition to their existing functions. Simultaneously, the licensing framework for CSCs by the Bank of Greece will be simplified.

4. Expansion of transactions implemented through the Immediate Payment System (IRIS). Specifically, freelancers and self-employed individuals are required to link their professional accounts to the Immediate Payment System.

5. Improvement of the Functioning of the Real Estate Acquisition and Leaseback Entity. The obligation of the debtor to pay the 12-year rents in case of earlier exercise of the repurchase right is lifted. At the same time, it is stipulated that the entity will acquire the properties with a 30% discount on their commercial value or the first offer price. This discount can also be utilized in the future by the debtor when exercising the repurchase right, as specified in the relevant ministerial decision.

6. Simplification and acceleration of the Bankruptcy Code procedures. It is provided that upon filing the bankruptcy application, the financial data of the debtor are automatically sought from public authorities and banks, while any errors in the data can be corrected during the discussion of the bankruptcy application to avoid its rejection. Additionally, a clear conclusion is reached in the bankruptcy process with the establishment of the discharge of the bankrupt by the act of the presiding judge.

7. Establishment of a Private Debt Monitoring Registry. The aim is to accurately identify the total private debt and its fluctuation trends to enhance the State's intervention capabilities.

8. Immediate disclosure of the names of businesses where the Bank of Greece identifies violations of legislation. The Bank of Greece will no longer be required to await the outcome of any judicial appeals before proceeding with the disclosure of violations.