14/04/2011 14:34
Amid strong disputes on the high interest rates imposed by the banks, usury and speculation have become penal offences as from today.
The relevant bill, which exempts the banks, sets a ceiling of 17% on the interest rates and aims to minimize the phenomenon since some try either to lend money with exceptionally high interest rate or taking advantage of the need and the mental weakness of the borrower to receive rates or properties disproportionate to the value of the initial sum granted.
According to the bill, usury is any interest rate exceeding 5% - 10% of the average consumer loans of the banks.
Via the bill, the state will be able to set the interest rate that the creditor will impose to the borrower to levels between 12.43% and 17.43%.
According to the bill, threats will be a penal offence punished with 1-year imprisonment, while blackmail will be punished with 14-month imprisonment. The bill was approved unanimously by all parties.
AKEL MP, Aristophanes Georgiou wondered whether the obligations of the banks are not usury, stressing that the issue must be examined by the new Parliament.
On the other hand, DIKO MP, Nicholas Papadopoulos noted whether the interest rates of 6% imposed by the banks are usury and wondered whether it was usury when the Parliament set an interest rate of 9% before the liberalization of the rates.
At the same time, he criticized strongly the government for its failure to cut the state expenditure.
He emphasized that the cost of borrowing in the Republic rose 1% and the government’s economic policy led to the interest rate increase.
This aroused strong feelings to AKEL MP, Nicos Katsourides, who said that “some might talk about Fukushima and the government might be responsible for that too”.
He wondered why the government is responsible for the interest rate increase by the banks and added that AKEL was once the only one to react to the liberalization of rates.
DISY MP, Averof Neophytou said that the economy of Cyprus was downgraded four times, while a new downgrade is probably underway.
“The increase in deficits pushes the cost of money of the citizens up and the financial sector was the only to support recovery. Some must be careful with their statements”, he concluded.
The relevant bill, which exempts the banks, sets a ceiling of 17% on the interest rates and aims to minimize the phenomenon since some try either to lend money with exceptionally high interest rate or taking advantage of the need and the mental weakness of the borrower to receive rates or properties disproportionate to the value of the initial sum granted.
According to the bill, usury is any interest rate exceeding 5% - 10% of the average consumer loans of the banks.
Via the bill, the state will be able to set the interest rate that the creditor will impose to the borrower to levels between 12.43% and 17.43%.
According to the bill, threats will be a penal offence punished with 1-year imprisonment, while blackmail will be punished with 14-month imprisonment. The bill was approved unanimously by all parties.
AKEL MP, Aristophanes Georgiou wondered whether the obligations of the banks are not usury, stressing that the issue must be examined by the new Parliament.
On the other hand, DIKO MP, Nicholas Papadopoulos noted whether the interest rates of 6% imposed by the banks are usury and wondered whether it was usury when the Parliament set an interest rate of 9% before the liberalization of the rates.
At the same time, he criticized strongly the government for its failure to cut the state expenditure.
He emphasized that the cost of borrowing in the Republic rose 1% and the government’s economic policy led to the interest rate increase.
This aroused strong feelings to AKEL MP, Nicos Katsourides, who said that “some might talk about Fukushima and the government might be responsible for that too”.
He wondered why the government is responsible for the interest rate increase by the banks and added that AKEL was once the only one to react to the liberalization of rates.
DISY MP, Averof Neophytou said that the economy of Cyprus was downgraded four times, while a new downgrade is probably underway.
“The increase in deficits pushes the cost of money of the citizens up and the financial sector was the only to support recovery. Some must be careful with their statements”, he concluded.
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