The Central Bank of Cyprus has issued an amending directive on procedures for granting new and reviewing existing credit facilities, published in the Official Gazette of the Republic on Friday.
The key change concerns what happens to collateral when a loan is repaid. Under the amended directive, when a secured credit facility is settled, the related collateral is released immediately. Where the security takes the form of a mortgage on immovable property, the timeline set out in the Immovable Property (Transfer and Mortgage) Laws of 1965 to 2025 applies, and the title deed must be returned to the borrower or the collateral holder accordingly.
The provisions do not apply where the mortgagor has given written consent to the mortgage not being discharged. Should the borrower subsequently revoke that consent in writing, the mortgagee is required to proceed with the discharge of the mortgage within the deadline set out in the Immovable Property Laws, calculated from the date of the written revocation.
The directive also addresses the costs of property valuations carried out during the review of credit facilities: these are to be borne by the credit institution, unless the loan agreement specifies otherwise.
The amending directive is to be read alongside the existing Directives on Procedures for Granting New and Reviewing Existing Credit Facilities of 2016 to 2023, with the full set now collectively referred to as the Directives of 2016 to 2026.
