The new regulatory framework put out for public consultation by the Ministry of National Economy and Finance is set to significantly reshape how non-performing loans (NPLs) are managed, restructured and transferred. At the same time, it seeks to impose stricter rules on servicers and create a much more tightly regulated environment for debtors.

The focus is not limited to restructuring an overdue debt. It encompasses the loan’s entire life cycle, from management and negotiations to its sale or transfer on the secondary market.

The servicer as an intermediary in loan sales

One of the most substantive changes concerns the role of loan servicing companies themselves. A servicer is no longer treated merely as the entity that collects payments and manages a portfolio on behalf of a bank or fund. It is also required to act as an intermediary in the sale and transfer of claims on the secondary market. Every transfer or sale of claims must be conducted exclusively through the servicer managing the specific portfolio on behalf of the buyer, while the servicing agreement must also set out the policy governing mediation in the relevant transactions.

This change is particularly significant for the non-performing loan market, as the servicer becomes the key intermediary between the holder of a claim and its next buyer. At the same time, the bill seeks to reduce opportunities for a lack of transparency by imposing additional reporting obligations to the Bank of Greece and stricter penalties for those who fail to provide the required information or submit incomplete or inaccurate data.

An “electronic file” under the Ministry of National Economy and Finance

At the same time, the Ministry of National Economy and Finance assumes a central role in the market’s new digital infrastructure, being designated as the competent authority responsible for operating the electronic platform for negotiations and transactions involving non-performing loans. The platform is not simply another digital tool for submitting a restructuring application. It serves as the electronic “file” for the process, documenting the main stages of negotiations between creditor and debtor.

The electronic platform takes on particular importance under the new bilateral restructuring procedure. The application, the main stages of the process, the creditor’s proposals, the debtor’s counterproposals, any rejections and, ultimately, the agreement must all be recorded electronically. Even if the two parties communicate through other means, every critical step must be entered into the system. This creates, for the first time, a unified electronic record of negotiations that can be used both to verify compliance with obligations and to supervise the market.

And this is where one of the most important changes lies: the debtor will no longer be dealing only with the servicer, but with a process that leaves an audit trail and is subject to supervision. The Bank of Greece will be able to check whether deadlines are being observed, applications are being examined, the required information is being provided and creditors are complying with their obligations. Administrative sanctions and corrective measures are предусмотрed in cases of violations. Supervision, however, will not become a mechanism for resolving the substance of every individual dispute: the Bank of Greece will not decide whether a particular restructuring arrangement is financially suitable for a particular debtor.

Transparency requirements and penalties

The new framework also seeks to change the relationship between servicers and debtors. Debtors will have the right to request, free of charge, a complete picture of their debt—from contracts and payment history to the way interest, commissions and expenses have been calculated.

If the servicer fails to respond, the suspension of interest accrual may even be imposed until the required information is provided. Automatic recalculation of the debt is also предусмотрed wherever the relevant caps apply, without the debtor having to submit a special application.

Before a foreclosure auction

The message to creditors is particularly strict when it comes to terminated or overdue debts. Before a foreclosure auction, creditors will be required to submit a written restructuring proposal that is appropriate, viable and substantiated. The new bilateral procedure is also given a specific institutional framework, rather than being left to each creditor’s discretion. At the same time, debtors who are complying with an active restructuring arrangement will receive stronger protection against termination of the arrangement, payment orders, seizures and foreclosure auctions.

Tight deadlines

Deadlines are part of the new framework, but they are a tool rather than the substance of the reform: the creditor has up to three months to respond to a complete application, the debtor has one month to respond to the proposal, and the overall process must not normally exceed six months. Most importantly, creditor inaction will no longer be without consequences: the platform will record delays and specific consequences will be triggered, including with regard to interest accrual and enforcement proceedings.

Thirty-two articles establish, among other things, a new negotiation system under which a creditor—a servicer or a bank—has up to three months to respond to a debtor’s request to enter negotiations. The debtor then has one month to respond and, if an agreement is reached, the two parties have a further month, plus 15 days, to sign it. Above all, the process is subject to an overall maximum of six months, while recourse to the out-of-court debt settlement mechanism may “pause” the countdown.

Pending Delays Resolution Procedures that have not been completed when the new framework enters into force will be subject to the new provisions. For debts that have already been terminated or are more than 30 days overdue and are not covered by an active restructuring arrangement, the creditor must notify the debtor within three months.

The message is clear: greater transparency in debt management, a record of every critical step, and less room for a process that until now could unfold largely outside a unified system of electronic oversight.

60 days → 2 months → 3 months → 1 month → 1 month (+15 days), with a maximum overall duration of six months.

Exception: if the out-of-court mechanism is activated, the clock for the bilateral procedure stops until that process is completed.

New meeting with the Ministry of Finance

Servicing companies are expected to raise their objections to the new framework with the Ministry of National Economy and Finance again today, as the bill significantly changes both their obligations toward debtors and their role in the secondary market for non-performing loans.

They question whether the bill’s provisions can be implemented in practice and believe that a substantial implementation timeline will be needed.

What the draft law provides, article by article

Article 213 – Obligations and transparency requirements for loan and credit servicing companies

Loan and Credit Claims Management Companies (servicers) are required to publish information at least once a year concerning their financial position, dividends, investments in systems and personnel, corporate governance, the portfolios they manage, their performance and their handling of borrower complaints. They must also continuously meet licensing requirements, submit an annual portfolio-management strategy to the Bank of Greece and apply principles of fair and diligent management.

Article 214 – Content of credit servicing agreements

The content of the agreement between a servicer and a credit purchaser is being amended. The agreement must now include a clause setting out a mediation policy for the sale of claims on the secondary market. The more specific reference to cases in which the servicer itself assumes the role of sale coordinator is being deleted. The change therefore concerns how mediation in the transfer of claims on the secondary market is provided for contractually.

Article 215 – Sales and transfers of claims on the secondary market

Mandatory mediation by the servicer is being introduced for sales and transfers of claims on the secondary market. Specifically, sales and transfers must be conducted exclusively through the credit servicer managing the particular claims on behalf of the credit purchaser carrying out the sale. The provision thus strengthens the servicer’s role in secondary-market transactions involving portfolios of claims.

Article 216 – Competent authority for the NPL electronic platform

The Ministry of National Economy and Finance is explicitly designated as the competent authority not only for the provisions already set out in Law 5072/2023, but also for implementing the new Article 24A. This concerns the electronic transaction platform for non-performing loans. The amendment clarifies which body is responsible for implementing and monitoring the specific obligations associated with the platform.

Article 217 – Penalties for inaccurate or incomplete information

A new violation is being introduced for credit servicers. If they fail to submit the required data and information to the Bank of Greece, or submit inaccurate or incomplete information, they may face penalties. It is also stipulated that Article 60 of Law 4261/2014 will apply to the publication of sanctions imposed by the Bank of Greece. This strengthens both the obligation to provide information to the supervisory authority and the public disclosure of violations.

Article 218 – Penalties for violations involving the NPL electronic platform

The authority of the Ministry of National Economy and Finance to impose penalties is being extended to cover violations of Article 24A, which governs the electronic transaction platform for non-performing loans. The applicable penalties are those already provided for under Article 27 of Law 5072/2023. The provision covers violations by credit servicers, credit purchasers and, where applicable, their representatives.

Article 219 – New framework for debtor protection

A new chapter is being added to Law 5072/2023 concerning debtor protection and the suspension of interest accrual. The new framework establishes the basis for a series of borrower rights, including access to detailed debt information, the suspension of interest when a servicer fails to meet its obligations, and protection for borrowers who comply with their repayment arrangements against collection measures. The specific rules are set out in the following articles.

Article 220 – Debt transparency and suspension of interest accrual

Borrowers, whether individuals or legal entities, will have the right to request from the servicer, free of charge and within 45 days, the contracts and amendments relating to their debt, their payment history, the method used to calculate the interest rate, and a detailed breakdown of principal, interest, commissions and expenses. If the servicer fails to respond fully within the deadline, interest accrual will be suspended until the information is provided.

Article 221 – Cap on interest accrual for claims

A mechanism is being established for the automatic recalculation of debts based on the caps set out in Article 39 of Law 3259/2004, subject to any more specific, lower caps. The recalculation will take place automatically, without an application from the debtor. Banks, their successors, purchasers of securitized claims and servicers will be required to recalculate the debt and record the revised outstanding balance. The measure also covers claims that have already been transferred or are subject to enforcement proceedings.

Article 222 – Protection for debtors who comply with their repayment arrangements

For as long as a restructuring arrangement remains in force and the debtor complies with it, termination of the arrangement, the issuance or enforcement of a payment order, seizures and foreclosure auctions will be prohibited. If a creditor or servicer breaches this protection, the relevant action will be automatically void, five monthly installments must be credited to the debtor, and the restructuring arrangement must be extended by five months.

A fine of €50,000 to €500,000 per borrower is also предусмотрed, with stricter penalties for repeated violations.

Article 223 – New powers for the Bank of Greece

The enabling provision that allows the Bank of Greece to regulate details concerning servicers through its decisions is being expanded. Specific matters are being added concerning the publication of information, the assessment of compliance and the implementation of the new obligations. The Bank of Greece will therefore be able to determine the required information, procedures and technical details for supervising servicing companies and implementing the new framework.

Article 224 – Annual audits of servicers managing securitizations backed by the state

Servicers managing claims arising from securitizations backed by a government guarantee or another form of public support will be required to undergo an independent management audit every year. The audit will cover, among other things, the fees and expenses of those involved in debt collection, as well as the servicer’s own remuneration. A summary of the findings will be made public, while the full report will be sent to the competent authorities and the Bank of Greece.

Article 225 – Mandatory restructuring proposal before a foreclosure auction

The creditor must submit a written restructuring proposal to the debtor at least three months before the foreclosure auction. The proposal must be appropriate, viable and substantiated on the basis of the debtor’s repayment capacity and financial circumstances. It is now linked to the new bilateral restructuring procedure. The obligation does not apply to repeat auctions, and debts owed by legal entities classified as large enterprises are exempt.

Article 226 – Establishment of a special bilateral restructuring procedure

A new part entitled “Special Bilateral Debt Restructuring Procedure” is being added to Law 5072/2023. This provides the institutional framework underpinning the following articles: who is eligible, how applications are submitted, what deadlines apply to borrowers and creditors, how negotiations are conducted and how the process is supervised.

Article 227 – Who is eligible for bilateral restructuring

A special negotiation procedure is being established between debtors and banks, financial institutions and servicers supervised by the Bank of Greece. The procedure can be used independently of the out-of-court debt settlement mechanism, and submitting an application does not preclude the use of another restructuring procedure. Debtors will not be charged for the process.

Debts may be included even if enforcement proceedings have already begun, provided that a foreclosure auction has not been completed with the property awarded to a successful bidder.

Article 228 – Definitions

The principal terms used in the new procedure are defined. “Reasonable living expenses” means expenses determined by the Government Council for the Management of Private Debt. A “restructuring solution” means an amendment to the contract establishing new terms for servicing the debt. A “final settlement solution” means an agreement for definitive repayment, which may also involve a change in ownership of collateral or other assets, with the debtor’s consent.

Article 229 – Application procedure and creditor response

When a debt is more than 90 days overdue, the creditor must notify the debtor within a maximum of 60 days that bilateral restructuring is available. The debtor has two months to submit an application and supporting documents.

The creditor must respond within three months of receiving a complete application, taking into account income, assets and reasonable living expenses. The response must either be a viable restructuring proposal or a reasoned rejection.

Article 230 – Debtor’s response

After receiving the creditor’s proposal, the debtor has one month to accept it, reject it or submit a reasoned counterproposal. If the debtor fails to respond within the deadline, the procedure is deemed concluded, unless there are grounds of force majeure.

At the same time, restrictions are imposed on the same debtor resubmitting an application for the same loans or credit facilities. This does not affect any procedure pursued by another co-debtor or guarantor.

Article 231 – Signing the restructuring agreement

After the proposal is accepted, the restructuring agreement must be drawn up and signed within one month, with the possibility of a single 15-day extension. The agreement constitutes an enforceable instrument for the claims it covers and applies to the debtor, guarantors, co-debtors and providers of security who participate.

It also permits the registration of a precautionary seizure and a mortgage prenotation, subject to the conditions set out in the Code of Civil Procedure.

Article 232 – Maximum duration of the procedure

A specific maximum time limit is being established for the bilateral restructuring procedure: it must be completed no later than six months after the submission of the complete application. The provision aims to prevent applications from remaining pending indefinitely without a clear endpoint and to establish a specific timetable for concluding negotiations between debtor and creditor.

Article 233 – Standardized application

The procedure begins with an application from the debtor, which must include all necessary information and supporting documents. A key change is that documents already submitted do not have to be resubmitted unless they have changed, need to be supplemented or have expired.

The aim is to reduce bureaucracy and the repeated collection of supporting documents during the restructuring process.

Article 234 – Digital platform

The bilateral restructuring procedure will be conducted through the digital platform provided for under Article 39 of Law 4818/2021. The main stages of the process and the reaching of an agreement will take place through this platform.

Communication between the debtor, guarantor and creditor may also take place through other means. However, every restructuring proposal, counterproposal, rejection or agreement must be entered into the platform promptly by the creditor.

Article 235 – Good faith and restrictions on enforcement

From the submission of a complete application until the procedure is concluded, the creditor’s internal functions must act in good faith and in a coordinated manner.

At the same time, enforcement measures against the applicant’s primary residence will be restricted: it will not be permissible to initiate enforcement proceedings, seek interim measures, register a mortgage or convert a mortgage prenotation into a full mortgage. Exceptions include filing a claim in a third party’s auction and maintaining existing rights in rem serving as security.

Article 236 – Validity of power of attorney

A power of attorney granted for the purposes of the bilateral restructuring procedure will remain valid until revoked, regardless of how much time has elapsed since it was granted. The only exception is where a specific legal provision provides otherwise.

The provision therefore concerns the duration of the authorization used to carry out the particular procedure.

Article 237 – Link with the out-of-court debt settlement mechanism

The new bilateral procedure is explicitly linked to the out-of-court debt settlement mechanism. If the debtor submits an application under the out-of-court mechanism, the deadlines for the bilateral procedure are suspended until the out-of-court process is completed.

Conversely, having previously entered the out-of-court mechanism is not, in itself, grounds for rejecting a new bilateral restructuring application. The framework also allows the bilateral procedure to resume after the out-of-court process ends, subject to specific deadlines.

Article 238 – Supervision by the Bank of Greece

The Bank of Greece is designated as the competent authority for monitoring creditors’ implementation of the bilateral procedure. It will check deadlines, the completeness of responses, communications and compliance with the framework.

It may conduct inspections, request information on a regular or ad hoc basis, and impose penalties. However, it will not resolve individual disputes between debtors and creditors concerning the terms of a restructuring arrangement.

Article 239 – Penalties imposed by the Bank of Greece

If the obligations under the new bilateral procedure are breached, the Bank of Greece may impose administrative sanctions and corrective measures. The sanctions will vary according to the status of the creditor: the relevant provisions for servicers, credit institutions and other creditors will apply.

The provision thus links the new restructuring framework to the Bank of Greece’s existing supervisory and enforcement powers.

Article 240 – Automatic recording of overdue cases

If the three-month deadline for the creditor to respond passes without a response, the case will automatically be marked as overdue on the digital platform. Interest accrual and the capitalization of interest will then be suspended, while the initiation of new enforcement measures or the continuation of pending proceedings will be prohibited, subject to the specified exceptions.

The platform will automatically notify the Bank of Greece, and repeated delays will be taken into account when assessing the creditor.

Article 241 – Dispute resolution

The Hellenic Financial Ombudsman will assume a mediation role between creditors and debtors in the restructuring of non-performing loans, including guarantors where necessary.

It will submit a consolidated quarterly report to the Bank of Greece on complaints and their outcomes, as well as any systemic risks. The Bank of Greece may examine complaints for supervisory purposes, but it will not resolve individual disputes.

Article 242 – Enabling provisions

The Bank of Greece will be empowered to determine, through its decisions, the operational details of the bilateral procedure.

Among other things, it will specify the required supporting documents, the minimum information that restructuring proposals must contain, how guarantors participate, what information may be requested from supervised entities, and which stages will be incorporated into the digital platform. Rules governing notification of debtors and guarantors are also предусмотрed.

Article 243 – Final provisions

This article adapts the terminology of the legislation to the new system. References to the Banking Code of Conduct will henceforth be understood as references to the new part governing bilateral restructuring.

At the same time, the existing “digital platform of the Code of Conduct” will be renamed the “digital platform for the bilateral debt restructuring procedure,” and all related references will be amended accordingly.

Article 244 – Transitional provisions

The transition from the existing Code of Conduct to the new system is regulated. Pending Delays Resolution Procedures that have not been completed when the new framework enters into force will be subject to the new provisions.

For debts that have already been terminated or are more than 30 days overdue and are not covered by an active restructuring arrangement, the creditor must notify the debtor within three months. The possibility of submitting a new application for certain procedures that have already been completed is also provided for.

Article 245 – Repealed provisions

When the new framework enters into force, paragraphs 2 to 4 of Article 1 of Law 4224/2013 will be repealed. These are provisions associated with the previous institutional framework of the Code of Conduct.

Their repeal completes the transition from the previous procedure to the new special bilateral debt restructuring procedure introduced by Article 226 and the articles that follow.