Banks to chase borrowers who refused to open their accounts

Banks have firmly focused their attention on debtors who have resorted to the provisions of the so-called Katseli law – named after former economy minister Louka Katseli – for protection now that their bank account secrecy has been lifted.

Borrowers had until last Saturday to reject the lifting of their account secrecy, and according to provisional figures as many as 20,000 utilized this option.

On the other hand, those who have not opposed the opening of their accounts will see banks gain full access to all their details. As a result, the banks will gain not just a snapshot of the balance of accounts on a given date but rather figures from the last five years, with lenders obtaining access to information about money transfers those borrowers have made in their effort to establish which are strategic defaulters and which have concealed incomes during that period.

If indications are found to suggest a borrower has been hiding income, then the probe could stretch beyond the last five years.

As for borrowers who have opposed the opening of their accounts, they now lose the protection from creditors that the Katseli law had provided, so that banks can utilize every measure of forced collection that the law allows them to, such as bank account confiscations and real estate property auctions.

Given that the outstanding cases under the Katseli law currently exceed 150,000, the number of those who have forfeited protection by rejecting access to their bank accounts amounts to 15 percent of those debtors, according to estimates by legal and notary sources – as banks have not yet collected all the data available. Lenders appear determined to exercise forced measures as they consider those borrowers to be strategic defaulters.