The Serbian government confirmed on Tuesday that it had adopted a draft law meant to solve the problems associated with mortgages indexed in Swiss Francs by allowing their conversion into the euro.
Finance Minister, Sinisa Mali is quoted as saying that the law solves the problem, adding that a compromise solution had been found following difficult negotiations.
“The remainder of the debt will be converted into euros and the converted amount would be reduced by 38 per cent,” he said and added that the draft law covers every person who took out a loan indexed in Swiss francs, regardless of how much they owe.
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“This Lex Specialis is a compromise solution between several interested parties – individuals and the associations representing them, the banks and the state as the third party,” Mali added.
Under the draft law, the highest possible interest rate is 3.4 per cent plus the three-month or six-month EURIBOR which means fixed interest rates cannot go higher than 4 per cent. It obliges banks to offer clients new contracts within 30 days of the law taking effect.
Within 30 days from the date of the law’s entry into force, banks are obligated to give their clients (with loans in Swiss francs) an offer to conclude a new loan contract. If the client accepts, loans will be converted into euros in accordance with this law. The client is also obligated to notify the bank thereof and conclude the conversion contract with the bank within 30 days from the date of receipt of the bank’s documents.
The statement also said that the law will solve the repayment problems facing 16,800 people with mortgages in Swiss francs.