Complaints to the Bank of Greece

The conditions for the granting of loans and all kinds of credit to natural or legal persons are freely determined  by credit or financial institutions on the basis of the policy each has in place concerning the assumption and management of (credit, market, liquidity, etc.) risks.

The responsibility of the supervisory authority is to:

• determine and ensure compliance with the capital requirements entailed by the credit policy of each supervised institution as a result of the risks it assumes;
• ensure compliance with the transparency and disclosure rules (Bank of Greece Governor’s Act  2501/2002), as currently in force.

Bank interest rates are freely determined in accordance with the principles governing the monetary policy of the European System of Central Banks, as developed within the context of an open market economy with free competition, according to Articles 2, 4 and 105.1 of the Treaty establishing the European Community and Article 2 of the Statute of the European System of Central Banks and of the European Central Bank.

In this context, the Bank of Greece has no authority to set limits on bank interest rates. However, according to Bank of Greece Governor's Act 2393/15.7.1996, the default interest rate applied by institutions operating in Greece to loans denominated in euro or in foreign currency may not exceed the interest rate applied in accordance with the agreement to a performing loan by more than 2.5% per annum.

In addition, on the basis of its responsibilities for the transparency of banking transactions, the Bank of Greece has adopted rules (Bank of Greece Governor's Act 2501/2002) according to which institutions are obliged to inform transactors about the conditions governing transactions, in order for the latter to be able to compare the costs between similar products and make the most profitable choice.

Against this background, for transparency purposes, the Bank of Greece will be publishing on its website a table showing comparative data on some of the key banking products and services (mortgage-consumer credit rates, etc.).

The pricing policy of credit institutions (commissions, costs etc. on all types of business) is determined by banking criteria in conditions of an open market economy with free competition.

The Bank of Greece has established transparency rules (Bank of Greece Governor's Act 2501/2002), according to which institutions are required to disclose in detail the amount of commissions and other expenses charged on all their operations.

Any abusive practices of credit institutions are dealt with by the Ministry of Development and Investment, General Secretariat of Commerce (1520@mindev.gov.gr). Learn more here (in Greek).

The Code of Conduct under Law 4224/1313 (Banking and Insurance Committee Decision No. 116/1/25.8.2014, as amended by Decision 195/1/29.7.2016 of the same Committee) is an out-of-court settlement framework applicable as from 31.12.2014. It establishes the general principles of behaviour and adopts best practices with a view  to enhancing confidence and promoting mutual commitment and exchange of necessary information between the borrower and the institution so that each party is able to weigh the benefits or implications of alternative forbearance or resolution and closure solutions.

The Code does not apply to contracts denounced before 31.12.2014.

As regards the Bank of Greece’s scope for intervention, its supervisory role is twofold:

• in accordance with paragraph 2 of Article 12 of Law 4281/2014, it may impose sanctions: (a) in the event of detection of weaknesses in the systems of supervised institutions; (b) in case of systematic non-application of the Code of Conduct, without, however, investigating each individual case or resolving disputes arising from the application of the Code between supervised institutions and debtors;
• in line with the legislation governing the supervision of credit institutions for capital adequacy and financial stability purposes, the Bank of Greece, in the context of the Single Supervision Mechanism (SSM), assesses the risks assumed by the institution from  loan forbearance agreements.

The Bank of Greece accepts complaints against the credit institutions it supervises as an indication of the degree of compliance of institutions, but does not intervene in the  disputes that arise.

If both parties exhaust the Code procedure and the objection procedure without finally agreeing on a mutually acceptable solution, it is for the courts  to decide, without of course excluding the right of the borrower to seek the intermediation of the Consumer Ombudsman, as provided in para. 3 of Article 1 of Law 4224/2013.

Issues related to admission to the membership of a credit cooperative, as well as withdrawal therefrom, including the acquisition and sale of cooperative shares, are regulated by Law 16667/1986, as currently in force.

In particular, the issue of the redemption value of a cooperative share upon withdrawal of a member from the cooperative is governed by Article 9 para. 2 of the aforementioned Law, which provides that, on the one hand, the payment of any capital gains is subject to a proviso that the cooperative’s capital requirements under the applicable prudential rules are not affected and, on the other hand, when the value of the cooperative share is calculated, the amount by which the provisions set aside fall short of the amount required by the supervisory legislation is deducted.

Also, according to article 149 of Law 4221/204, " Any redemption of cooperative shares, including in case of withdrawal or exclusion of members, resulting in a reduction, in the course of the financial year, of more than 2% in the own funds of a credit institution that has the form of a cooperative under Law 1667/1986, as defined in Article 92 of Regulation (EU) 575/2013 and Article 65 of this Law, shall be subject to prior approval by the Bank of Greece. In any event, the Bank of Greece may prohibit any redemption of cooperative shares if it jeopardises the viability of a credit institution operating as a credit cooperative.”

Bank of Greece Governor's Act 2501/2002 has established the pre-contractual information to be provided to the borrower regarding foreign exchange risk and the possibility and cost of using risk hedging techniques.

In addition, Bank of Greece Banking Supervision Department document no. 484/19.3.2007 provided supplementary instructions to credit institutions so that transactors fully understand the risks they are  to assume.

For this purpose, it was recommended that credit institutions include in the contract an example of calculation of the loan repayment instalment (principal and interest), based on the most unfavourable exchange rate of the underlying currencies over the past three years.

The need to inform borrowers of foreign exchange risk was also underlined by the European Systemic Risk Board (ESRB), which, in the absence of a harmonised Community framework on this issue, in 2011 addressed to Member States a Recommendation on lending in foreign currencies, recommending that they require financial institutions to provide borrowers with adequate information regarding the risks involved in foreign currency lending before the conclusion of the loan agreement (ESRB 2011/C 342/01).

As far as our country is concerned, because the relevant requirements were already in place, Circular No. 457/23.4.2013 of the Banking Supervision Department was issued, supplementing the methodology for establishing the example of calculation of the loan repayment instalment.

The ESRB has already assessed the compliance of the competent authorities and Member States with the above Recommendation and determined that Greece  has fully complied.

The Code of Conduct under Law 4224/2013, which has been adopted by the Bank of Greece, deals with the issue of loans in arrears  as a whole, without excluding foreign currency loans.

The obligation, under Bank of Greece Governor's Act 2325/1994, to keep in the loan file the above certificate concerned procedures for granting foreign currency loans. Since the full liberalisation of capital movements pursuant to Presidential Decree 104/14.5.1994, an FEC is no longer necessary for foreign currency provision and export. Therefore, after the adoption of the euro as a national currency by Law 2842/2000, the rules on borrowing in foreign currency provided for in the above Act became obsolete in their entirety.