A matter of days is the announcement by banks of a plan to support vulnerable borrowers from increasing interest rates, which was also the main topic of the meeting of the Minister of Finance with the heads of four systemically important banks and representatives of the Bank of Greece, which ended some time ago.

According to the information, the heads of the banks have presented a support program for which they received approval from the ARIA and are now waiting for their specialization and official announcement. For the rest of the issues, that is, the increase in interest rates on deposits and the gradual reduction of bank commissions and fees, announcements will be made in the coming months.

“The Ministry of Finance has received a loan offer from banks approved by the European Supervisory Mechanism and banks will make announcements in the coming days,” said a source close to the discussions.

Banks are planning

As MR wrote today, the proposal includes a 50% subsidy for the increased installment on their loan retroactively from last July until the end of 2023. The subsidy will be administered through a general fund in the form of a piggy bank to be set up in the Special Secretariat for Private Debt and to which the four systemic banks will contribute to cover those households that meet the income and wealth criteria that the law provides in order to someone has been classified as vulnerable. This applies to about 30,000 vulnerable borrowers who have an income of 7,000 to 21,000 euros depending on the protected members and have a mortgage on their first home.

The banks’ proposal provides for subsidizing informed borrowers, that is, those who do not delay payment on a loan for a period of more than 3 months, regardless of whether the loans are banks – systemic or not – or they owe funds.

The mechanism for launching the subsidy payment will be “pushed” on the platform of the Gefyra program, which operates in the Special Secretariat for Private Debt Management. Borrowers who meet the income and wealth criteria to qualify as vulnerable will enter the platform that will be open for this purpose and apply for the grant. The amount of the subsidy will be credited to a special account. However, the fee they will pay to the Bank will be based on their loan agreement and will not be reduced. So it will be a subsidy in the form of a return of money to the borrower’s account. Accordingly, the amount of the subsidy will be collected by the four systemically important banks into a common fund in the form of a piggy bank, through which EGDIX will credit the amounts to the beneficiaries.

As for the subsidy fund, according to the banks’ calculations, it will be about 20 million euros, and the perimeter of the loans that will be included is estimated at no more than 2 billion euros. Accordingly, the number of borrowers is estimated not to exceed the initial forecast of up to 30,000 borrowers, with the prospect of increasing to nearly 32,000 if borrowers whose loans have been securitized are also included in the subsidy scheme.

Source: money review