The troika technocrats are visiting the island as part of the third review of the Cyprus adjustment programme and met with representatives from the banking sector. The association argued that the current definition of an NPL, as given by the CBC, is harmful for the economy and can hamper the banks’ efforts at exiting the financial crisis.

A representative of the Bankers Association, Michalis Kronidis told the Cyprus News Agency (CNA) that currently the CBC classifies NPLs as any loan for which any payment has stopped for a period of 90 days, not taking into consideration the possibility that it may have been restructured. The CBC also considers as NPL any loan that has been restructured twice within 18 months, despite the fact that payment may have recommenced. “The guidelines issued by the CBC increase the number of NPLs and negatively affect a bank’s standing and projected profit,” Kronidis said, adding that the association also disagrees with the strict guidelines for giving out new loans. “It’s good that we have some new rules but we have gone from one end to the other,” he said.

Source: Cyprus Mail