The Legal / Regulatory Framework for Non-Performing Loans in Greece
Under the ever-increasing pressure of the continuously growing number of Non-Performing Loans (“NPL’s”) held by the Greek Banks as a result of the ongoing economic crisis in Greece, the Greek Parliament has enacted specific legislation introduced by the Greek Government, aiming at the establishment of a legal and regulatory framework for the transfer of NPL’s from the banks, which currently hold them, to third parties, which will undertake the management and liquidation thereof.
This legislation is intended to create a secondary market for NPL’s and also for performing loans in Greece and it is aimed at sanitising the balance sheets and portfolios of Greek banks whilst helping at the same time the borrowers of such NPL’s to restructure their obligations under the NPL’s in a more efficient and/or favourable for them manner.
The aforesaid legal and regulatory framework governing the transfers, management and liquidation of NPL’s in Greece has been established by the provisions of Law 4354/2015, as amended by Law 4389/2016 and Law 4393/2016 (the «NPL Law»). The main provisions of the NPL Law are summarized below.