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New plans for loans in Swiss franc

19/11/2015 11:56
Banks will submit new revised and improved repayment plans to the Central Bank for the regulation of loans in Swiss francs.

Speaking to the Parliamentary Committee on Finance, a representative of the CB said that after meeting with the association of banks and concerned banks, they came to the conclusion that it is difficult to have a single plan for all banks and borrowers.

However, he said, that the banks agreed to submit revised plans, taking into account the benefit of the borrower, the interest rate differential, the amount borrowed and the date of agreement of the loan.

He also noted that in case of loan repayment more favorable terms should be given to borrowers and he suggested that banks should present to borrowers a good repayment plan with a lower interest rate.

He added that banks will submit statements to the CB showing the number of loans restructured and how many were written off.

He stressed that the CB cannot proceed to any other actions because anything done for systemic banks requires ECB approval.

According to the representative of the CB next week the central bank will send a circular to banks for submitting revised plans, stressing that it will concern loans made in Swiss francs in order to purchase a primary residence.

On behalf of the association of banks it was reported that there are already plans by banks and arrangements are already underway.

A representative of the association pledged that plans with more favorable terms will be submitted, which will be monitored on a quarterly basis by the CB.

He said that existing plans include loss absorption by the bank, write off of the principal capital and suspension of installment payment, adding that plans to be submitted will be on this basis.