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EY Cyprus COVID-19 Updates

Law on the enforcement of emergency measures by Financial Organisations and Supervisory Authorities due to COVID-19

On 30th March 2020 the Cyprus Parliament issued Law 33(I)/2020 on the enforcement of emergency measures by financial organisations and supervisory authorities due to COVID-19 (the “Law”), the primary purpose of which is the protection and sustainability of the Cyprus financial system, which is called to overcome the obstacles caused due to the pandemic of COVID-19.

Specifically the Law applies, amongst others, to (i) credit institutions (i.e. banks), (ii) insurance undertakings, (ii) alternative investment fund managers, (iv) credit acquiring companies and service providers, as well as (v) payment institutions, (vi) Cyprus Investment Firms and (vii) non-credit institutions, and (viii) credit intermediaries who, in the course of their business, conclude credit agreements with consumers for residential property (the “Credit Institution” or collectively referred to as the “Credit Institutions”). The Law provides the below emergency measures which are of a temporary nature and have limited duration.


The Law provides for the suspension of loan instalments (principal amount) payable to the Credit Institutions (including overdraft accounts and/or credit card accounts and/or other credit facilities, collectively referred to as the “loans” for ease of reference), including suspension of payment of interest amounts for such loans, which have been granted by the Credit Institutions to the following eligible categories (the “Applicants”):

·        Natural persons,

·        Legal persons,

·        Self-employed individuals, and

·        Businesses.

The Applicants may submit the relevant application declaring difficulty in continuing with the payment of their loan instalments to the relevant Credit Institution as long as there were no overdue payments to their credit facilities for a period of over 30 days (from their due payment date) starting from 29th February 2020.

The Applicants can submit their application to the Credit Institution (i) in writing, via (ii) email, (iii) post or (iv) fax. All Credit Institutions have issued via their websites relevant contact details and applications which Applicants can submit to their attention.

The suspension of loan payments is effective for a period of 9 months commencing on 30 March 2020 (i.e. until 31 December 2020), which corresponds to the duration of the Decree issued by the Minister of Finance in accordance with the powers conferred to him by the Law.

With the expiration of the Decree (i.e. on 01/01/2021) the total interest amounts which were suspended from payment will be added to the loan amount. However, it should be noted that with the expiration of the Decree, Credit Institutions will not be allowed to declare the suspended total principal and interest amounts immediately due and payable, unless this is otherwise agreed between the parties.

Further, and in accordance with the announcement on 03 April 2020 by the Association of Cyprus Banks, Credit Institutions (which are members of the Association) have declared that no compound interest will be applied to the interest amounts payable over the suspension period.

It should be further clarified that Credit Institutions cannot reject an application for suspension by an Applicant, except where the credit facilities of such Applicant do not fulfil the relevant criteria as provided by the Law (i.e. in cases where the Applicant’s credit facility has been due for over 30 days).

With the approval for the suspension of loan instalment payments it will by default be accepted that the terms of the current loan agreement (excluding repayment terms) and all security documentation (i.e. mortgages) will continue to be in force both during the suspension period and after the expiration of such period (i.e. even after 31 December 2020).

From 01 January 2021 onwards (or as it may be otherwise agreed between the parties) the repayment of instalments (principal amount plus interest) restarts, and it is considered that the repayment period has automatically been extended for as long as it may be required until the final repayment of the loan (or unless otherwise agreed between the parties). During the suspension period, the Applicants may continue with the payment of instalments (principal and/or interest amounts) towards their credit facilities on a voluntary basis. 

The suspension of payments is not limited to one credit facility of the Applicants or with one Credit Institution; in fact, Applicants may submit applications to any of the Credit Institutions with which they have ongoing financial obligations and can declare for which credit facilities they would require suspension of payments. In cases where the loan has been entered into with one Credit Institution and the direct debit order is executed by another Credit Institution, Applicants must inform both Credit Institutions and provide relevant instructions for the suspension of payments. 

The Law further provides for additional emergency measures as per below:


1.     Suspension of procedures of measures undertaken by Credit Institutions for the recovery of credit facilities which fall under the provisions of the Decree. It is clarified that the non-payment of instalments does not constitute a contractual breach by the Applicant and neither does it declare the credit facility as non-performing, thus prohibiting the Credit Institution in taking any action for recovery of debt.


2.   Suspension of the requirement to prepare, submit and publish the financial accounts of Credit Institutions for the year 2019, provided that the Credit Institution has submitted a written application to the relevant supervisory authority.

3.   Suspension of the obligation to submit financial accounts by self-employed and businesses (which fall under the provisions of the Decree as detailed above) to the Credit Institutions for the year 2019, provided that they submit a written application to the relevant Credit Institutions.


For additional information with respect to this Alert, please contact the following:


Charalambos G. Prountzos

CESA Law Leader, Law and Funds Services Leader of ΕΥ Cyprus

Charalambos.Prountzos@cylaw.ey. com


Andria Koukounis

Director, Regulated Financial Services

Tel: +357 22 050 574


Mikaela Kantor

Senior Associate, Regulated Financial Services

Tel: +357 22 050 482


Prountzos & Prountzos LLC

36, Agias Elenis Street, Galaxias Building,

Block B, Office 602, 6th Floor,

1061 Nicosia, Cyprus

Tel: +357 22 669699 Fax: +357 22 669650





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