Georghadji said that the CBC Board will hold meetings with the commercial banks on the issue.

“We carry out meetings with all commercial banks to brief them on our thoughts on the interest rates and restructuring,” she said.

In the backdrop of a three and a half year recession and following the financial meltdown in 2012, the Cypriot banking system is hampered by non-performing loans which amount to 50% of the sector’s loan portfolio. On March 2013 Cyprus concluded on a €10 billion bailout with the EU and the IMF, with the island’s lenders noting that the key to reducing high NPLs is debt restructuring.

“We came up with a solution which could help borrowers restructure their loans with interest rates as these loans were serviced,” she said, adding that significant rate reductions will be applied in case of restructured loans.

Georghadji pointed out that studies carried out by the CBC show great divergence of lending rates of Cyprus and the rest of the eurozone, adding the same divergence applies in the case of deposit rates.

On its part, OEB General Director Michalis Pilikos said that the reduction of lending rates is a key priority.

“Businesses needs urgently credit to be able to hire employees and to be able to operate,” he concluded.

Source: Cyprus Mail