Loans: The new cooperation regime between financial institutions for the management of debtors

Changes to the cooperation regime between the financial institutions for managing them provide for the bill brought to the public yesterday (1.4.2024) in public consultation by the Ministry of Finance ( ). In particular, it provides that when more than one financial institution has or manages outstanding claims against the same debtor, in respect of which there is sufficient evidence that it is in a present or imminent failure to fulfil its financial obligations, they may cooperate in order to process and submit to the debtor a joint proposal in order to find a viable solution. To this end, such persons may exchange with each other as much information as is necessary in order to assess the viability of the debtor’s undertaking and to formulate the conditions of the joint proposal, which they shall submit under this Chapter. Without prejudice to compliance with the conditions laid down in the specific framework, financial institutions may jointly lay down rules concerning their participation in the procedures of this Chapter, having and having the obligation to make them public: conditions for examination and/or acceptance of applications, automated processing process, debt restructuring proposal production process, positioning conditions of acceptance, indicatively that the offer is acceptable only in its entirety and not only in its parts, the way and the media, including the electronic platform, debtors for the procedures and conditions of this Article, the issuance of certification and the formation and use of early warning tools and notice mechanisms to avoid the insolvency of their debtors. The above may be differentiated by type of debtor, for example, with respect to natural persons whose debts are not related to commercial, professional or business activity or to the guarantee of principals or liabilities relating to one or more of those activities, and to undertakings depending on their size or the amount of their debts by entity or as a whole. Financial institutions are entitled to regulate loans or credits of any kind to natural or legal persons for which they have been guaranteed by the Greek State without limitation in respect of all their general and specific conditions, in particular the duration, the interest rate, the amount of the installment and the periodicity of the instalments. Regardless of the regulation, the above guarantees provided in favour of the financial institutions of the Greek State remain valid as a whole, without a quantitative increase in its guarantee liability. The limitation of the claims of the financial institutions against the Greek State, as a guarantor, as well as the deadline laid down in the relevant ministerial decisions, shall be suspended from the date of final submission of the application referred to in Article 8 until the completion of the application process in any way, as well as for as long as the restructuring contract for which the Greek State guarantee has been granted is in force. Requests for forfeiture already submitted until the date of final submission of the application referred to in Article 8, whether or not they remain valid. Where the procedure is successfully completed and the proposed Restructuring Convention enters into force when it is implemented, the debt may be monitored on a new account in which the characteristics of the arrangement are reflected. If an amount of remission is provided, financial institutions shall be entitled to request the Greek State as guarantor the one-off payment of the guaranteed portion of that amount as a whole, with a request to the competent office of the General Accounting Office of the State, submitted immediately after the entry into force of the Restructuring Convention. The Greek State is making repayment of its obligations as guarantor of the amount of the principal debt which is fully written out, without the confirmation of this amount, as an income of the Greek State, against the natural person, to the competent Public Economic Service and by proportional application of the procedure. The termination of the Restructuring Convention for any reason provided for in the present, in the current ministerial decisions concerning the extrajudicial mechanism, as well as in the Restructuring Convention and its Annexes, which results in the loss of the regulation with regard to the complainant financial institution, on loans or credits guaranteed by the Greek State, implies the revival of this debt to the amount it had before the Restructuring Convention, which becomes fully due and directly payable, deducted amounts paid in the meantime under that arrangement, and by the Greek State as guarantor. The financial institution is entitled to submit to the Greek State a request for a down payment for the guaranteed balance of the debt as set out above after the revival. The above applies also to loans guaranteed by the Greek State to natural persons or groups of natural persons, by way of derogation from the provisions for the submission of down payment claims, per instalment, in accordance with the relevant ministerial decisions granting the guarantee, the termination of the Restructuring Convention, which also constitutes a termination of the regulated contract. For debts from loans or credits guaranteed by the Greek State, the application under Article 8 is also submitted and the Restructuring Convention is mandatory by all parties involved (feelers, co-debtors, guarantors other than the Greek State.