No bank secrecy for Katseli Law applicants

The Economy Ministry and the country’s creditors have agreed on the full lifting of bank confidentiality concerning debtors benefiting from the law protecting borrowers, known as the Katseli Law after the minister who introduced it earlier this decade.

Bank secrecy will be lifted regarding both new applications submitted from now on and those already made. To date the measure has only concerned enterprises that have applied to enter the extrajudicial debt settlement mechanism, which are forced to reveal all of their assets.

The extension of the measure to individual debtors has long been a key demand by banks in their effort to identify strategic defaulters, who are estimated to account for about a third of those applying for protection by the Katseli Law.

Although abuse of the rights granted by the Katseli Law does not necessarily mean that those borrowers have big bank deposits, it is certain that the lifting of bank confidentiality will assist in finding those who deliberately avoid paying their dues so that the protection by the law is granted only to those who truly need it.

Notably, the Katseli Law’s provisions expire at end-2018, and one of the issues to be discussed with the creditors is its possible extension for another year.