first_imgFINANCIAL Ombudsman Pavlos Ioannou said that he ruled in favour of relieving a woman of her obligations from a loan she had guaranteed 26 years ago after the bank failed to inform her that it was in arrears.Ioannou said on state-radio CyBC on Wednesday that his ruling was based on the retroactive effect of the law on the limited protection of guarantors of a particular category which came into force in 2015 and which could apply in the woman’s case.The unnamed woman had agreed with a cooperative bank to guarantee a CYP25,000 (€42,715) loan in 1991, Ioannou said. The bank subsequently failed to inform her about how the loan was performing and when the borrower eventually died, it did not attempt to collect the dues from the inheritors of the deceased.At some point, when the woman went to the bank to apply for a loan for herself, she was told that the loan she had guaranteed remained unpaid and that the outstanding had in the meantime risen to €365,000, Ioannou added.For the ruling to be binding, both sides have to accept it, he said.Whether the state-owned Cyprus Cooperative Bank will accept the ruling and what the probable impact will be on its capital, remains unknown as the bank was unavailable for comment.In March, the ombudsman ordered the return of €111m to overcharged Co-op borrowers and as a result the bank has had to re-adjust its provisions within the 2015 earnings to show more losses. The bank, which is struggling with about €6.5bn in non-performing loans that represent more than half of its portfolio, is currently working on a listing on the Cyprus Stock Exchange as part of its effort to raise several hundred million euros in fresh capital with the issue of new shares over the next years. The Cyprus Cooperative Bank received almost €1.7bn in 2014 and 2015 in taxpayer’s money to comply with capital requirements.“What’s important is not the decision itself, but the legal framework that we could apply in the specific case provisions which allowed us to come to this decision,” Ioannou said.He added that it was clearly in the “legislator’s intention” to include a clause in the law which apply retroactively in the case of this guarantor, Ioannou said, adding that her case was not an isolated one.You May LikeDr. Marty3 Warning Signs Your Dog Is Crying For HelpDr. MartyUndoTruthFinder People Search SubscriptionOne Thing All Liars Have in Common, Brace YourselfTruthFinder People Search SubscriptionUndoPopularEverythingColorado Mom Adopted Two Children, Months Later She Learned Who They Really ArePopularEverythingUndo Pensioner dies after crash on Paphos-Polis roadUndoCypriot tycoon launches ‘Bank of Cannabis’UndoThree arrested in connection with hotel theftsUndoby Taboolaby Taboolalast_img

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