Information to Borrowers in Financial Difficulty
Gordian Holdings Limited (“Gordian”) aims to always treat fairly its borrowers and fully adheres to the Code of Conduct on the Handling of Borrowers in financial difficulties (“Code”) issued by the Central Bank of Cyprus (“CBC”).
The CBC issued, on 3 April 2015, the revised Directive on Arrears Management of 2015. This Directive, available at the website of CBC, regulates the arrears management framework and establishes the Code of Conduct between Authorised Credit Institutions (“ACIs”) and borrowers. The Code is part of the Directive on Arrears Management (Appendix 2 of Directive).
Τhe provisions of the “Code” are applicable to the following persons:
- Natural persons granted credit facilities by an ACI with total outstanding balances of credit facilities (including credit facilities of their connected persons) up to one million euro (€1.000.000). The said scope of application includes guarantors of the borrower and third parties who provided securities to the ACI for the specific borrower’s credit facilities.
- Micro and small enterprises granted credit facilities by the ACI with total outstanding balances of credit facilities (including credit facilities of their connected persons) up to one million euro (€1.000.000). Micro and small enterprises are defined as follows (European Commission Recommendation of 6 May 2013 concerning the definition of micro, small and medium-sized enterprises (2003/361/EC)):
Number of employees
Annual turnover or balance sheet total
< or = € 2 million
< or = € 10 million
Registered with VAT and Social Security
It is noted that the following persons do not fall within the scope of application of the Code:
- Persons for which an application for bankruptcy was filed by a creditor;
- Persons for which a receiver or administrator was appointed by a creditor;
- Persons for which a dissolution decree was issued.
The Arrears Management Process
In accordance with the Code, Gordian has introduced a process designed to assist its borrowers who are in arrears with their loan repayments or at risk of going into arrears, by finding a resolution for them. Borrower engagement is central to this arrears management process. The process includes the following steps
Communication between the borrower and Gordian as the lender, to get a better understanding of the borrower’s current financial difficulties and to give the borrower a better understanding of the arrears management process.
- Financial Inforamtion:
In order for Gordian to review the borrower’s circumstances and assess whether there is a resolution suitable for the borrower, Gordian needs to have a good understanding of the borrower’s current obligations. Depending on each borrower’s circumstances financial information should be provided to Gordian to carry out the assessment.
- Assess the financial Information:
The Responsible Officer at Gordian will carry out a thorough review of the financial information and other circumstances to assess if there is an appropriate resolution for the borrower.
- Propose restructing solutions:
Having reviewed the borrower’s circumstances, the Responsible Officer will identify if there is an appropriate, sustainable solution for the borrower’s obligations.
- Communnicate the restructuring proposal:
The proposed resolution will be communicated to the borrower in writing. The borrower’s consent is required in order to reach to an agreement in respect to the proposed arrangement.
Procedure for the submission of Appeals
The Company has established an Appeals Committee, which is responsible for examining whether the provisions of the Code have been adhered to with respect to credit facilities for which appeals are submitted by borrowers, who fall within the scope of application of the Code.
According to the Directive, the Company will provide the borrowers with an official acknowledgement of the receipt of the appeal, which may not be later than twenty one (21) days from the date of receipt of the appeal, and an official decision of the Appeals Committee, which may not be more than two (2) months from the date of receipt of the appeal.
The Appeals Committee has the right to invite the borrower who filed the appeal for a meeting as well as the obligation to have a meeting with the borrower should he / she request for such a meeting.
Borrowers who wish to submit an appeal must do that in writing by filling out the SUBMISSION OF APPEAL ON RESTRUCTURING form, available here.
The form should be completed in full, signed by the borrower, and sent with all supporting documents either:
- By post in a sealed envelope to the following address: Secretary of the Appeals Committee, 4 Evagorou Street, 2121, Nicosia, Cyprus, or
- Via e-mail to email@example.com.
Mediation Procedure via the Financial Ombudsman
The borrower has the right if he/she/it wishes to submit a written request to the Commissioner of Financial Disputes Resolution (“Commissioner”) for the appointment of a Mediator in relation to the restructuring of credit facilities provided that the total contractual obligation of the borrower does not exceed three hundred and fifty thousand euro (€ 350.000) and is secured by a mortgage or collateral assignment over a property used as a main residence (resident owner for a period of at least six months per year).
The application for appointment of the Mediator can be submitted within 14 working days from the day:
- The borrower shall submit the "Personal Financial Statement" (PFS) to Gordian or
- Gordian shall submit to the borrower the "Letter of Offer" / "Letter of negative decision” for the restructuring of credit facilities.
The duration of the mediation process shall not exceed 1 month, the cost for the use of the Ombudsman's services does not exceed five hundred euro (€500) and is allocated 80% to Gordian and 20% to the borrower.
Contact details for the Commissioner of Financial Disputes Resolution:
ADDRESS: 13, Lord Byron Avenue, 1096 Nicosia.
POSTAL ADDRESS: P.O. Box 25735, 1311 Nicosia.
TELEPHONE: 22848900 (central number)
FAX: 22660584, 22660118