Arrears Resolution Process (ARP) within the framework of the Code of Conduct under L.4224/2013

What is the Code of Conduct under L.4224/2013 and what is the subject of its provisions?

The Code of Conduct under L.4224/2013 is drawn up by the Bank of Greece (BoG) for the management of Individuals’ and Enterprises’ of loans in arrears and non-performing loans. It establishes the general principles as well as the rules of conduct for Banks & borrowers and adopts the best practices, which aim at reinforcing a climate of mutual trust, commitment and timely exchange of necessary information between the borrower and the Bank, in order for each side to be able to weigh the benefits or the consequences of alternative arrangement or definitive settlement solutions of loans in arrears. Within the afore-mentioned framework, the Arrears Resolution Process (ARP) is introduced for implementation by the Banks, as well as the borrowers facing financial difficulties.

Arrears Resolution Process (ARP)

What is the Arrears Resolution Process (ARP)?

It is the procedure stipulated by the Code of Conduct under L.4224/2013, for implementation by the Banks, as well as the borrowers facing financial difficulties. The ARP describes the stages, deadlines and the minimum content of information, which should be provided mutually by the Bank and the borrower, so that the risks and the repayment ability of each borrower are evaluated properly, whether it is a case of an Individual or an Enterprise.


To Whom is the Arrears Resolution Process (ARP) addressed to?

  • To the borrowers facing financial difficulties and being unable to meet their debt repayment plan
  • To the borrowers for whom it is estimated that a change in their financial situation will lead directly to their inability to meet their loan obligations
The term “borrower” is to be understood to cover, within the framework of the Code of Conduct under L.4224/2013, for both the Individuals and the Enterprises.


What are the benefits of the Arrears Resolution Process (ARP)?

  • The collaboration of Bank – borrower enables a suitable solution to be reached in a timely manner, as it is performed within a climate of mutual trust and honest exchange of information.
  • Each case of a borrower is dealt separately, after the Bank has taken into consideration all the borrower-related data and information, adhering at all times to the framework defined by the principles of confidentiality and personal data protection.
  • For the arrangement proposal submitted to a borrower – individual, the level of “reasonable living expenses” is also taken into account among other things.
  • The adherence to the transparency rules as well as the detailed information of the borrower is ensured.


Which are the implementation stages of the Arrears Resolution Process (ARP)?

 1  Communication between borrower-Bank

 2  Submission of borrower’s financial data

 3  Assessment of borrower’s financial data and overall financial situation

 4  Submission of suitable proposal for arrangement or definitive settlement solution of the borrower’s debts

 5  Submission of borrower’s appeal

Which are the types of arrangements offered by Piraeus Bank?

In response to its customers’ needs for servicing their debts in a way that is compatible with their financial capacity, Piraeus Bank has developed a wide range of solutions. On the basis of the financial data assessment submitted through the new process, the following choices will be considered as an example for the arrangement of the borrowers’ debts:


  • Arrangements that decrease the monthly installment providing:
         payment of interests only, for a time period
         payment of a part of the interests, for a time period
         decreased fixed installment by increasing the loan duration
         decreased installment, which is readjusted gradually
         change of type of interest rate charge (fixed or variable)

  • Arrangements that decrease the monthly installment and, at the same time, offer a major reduction in the interest rate and a flexible repayment plan, by providing additional collateral


  • For the customers holding more than one unsecured loans, they are provided with the option of debt consolidation in a new loan with new terms and a monthly installment that is readjusted to their financial capacities


  • In addition to the afore-mentioned, the following are also provided especially for enterprises:
         Deferment of loan installment
         Adjustment of installments taking into account the specific time period in the borrower’s liquidity
         ΤTypes of definitive settlement, providing for arrangements, which include, among others, the voluntary liquidation of a part
             of the borrower’s assets

How is the “Cooperating Borrower” defined?

Within the framework of the Code of Conduct under L.4224/2013, a borrower is characterized as “Cooperating” when he complies with the following general principles of conduct with regards to his collaboration with the Bank and more particularly when:

  • Provides complete and updated contact data to the Bank [fixed-line, mobile and fax numbers, email, residence and work address],
  • Designates a relative or friend as an authorized representative, in case that the borrower is not available,
  • Is available for a contact with the Bank or with anyone acting legitimately on its behalf and responds to the calls and letters with honesty and clarity within fifteen (15) working days,
  • Discloses information regarding his current financial situation or regarding the change of his financial situation to the Bank with sincerity within 15 working days from the day of change in his financial situation or within fifteen (15) working days from the day on which the relevant information will be requested by the Bank or anyone acting legitimately on its behalf,
  • Proceeds, either in person or through his representative, with the complete and sincere disclosure of information to the Bank or anyone acting on its behalf, and such information will have substantial implications to his future financial situation, within fifteen (15) working days from the day on which he will take cognizance of such information [e.g. fulfillment of requirements for receipt of allowance, appearance of new assets which will be acquired by the borrower (inheritance etc.), loss of assets ownership, dismissal announcements, terminations of leases, redemption of insurance products, profits in any form, etc.] and
  • Consents to the investigation of an alternative restructuring proposal with the Bank or anyone acting legitimately on its behalf, as laid down by the Code of Conduct under L. 4224/2013

What are the consequences of being characterized as “Non-cooperating borrower”?

A borrower is characterized as “Non-cooperating”, when he does not meet all the afore-mentioned obligations, with the following consequences:

  • Possibility of terminating his financing agreement directly
  • Possibility of commencing the enforced recovery of debt (for instance foreclosure and auction of the borrower’s sole residence)
  • Debt surcharges for default interests and court expenses

How are the “reasonable living expenses” defined?

In regards to individuals, the reasonable living expenses are calculated on the basis of the data provided by the Household Budget Survey (HBS), which is conducted annually by the National Statistical Service of Greece (the relevant methodology and information note are available at the URL addresses http://www.hba.gr and http://www.efpolis.gr/el/

The assessment of the borrowers’ financial situation within the framework of ARP is performed by taking into account the 1st group of expenses, which are considered to be the most basic for the living of a household.

The basic expenses included in the formation of the basket of households’ reasonable living expenses are the following:

  • All food expenses
  • All clothing and footwear expenses
  • All residence-related expenses
  • All expenses linked to transportation, maintenance and repair of means of transport as well as the insurance premium of the car-motorcycle
  • All expenses for the use of urban and extra-urban transport services
  • Expenses related to the repair and maintenance of durable household goods
  • All consumables for the usual household consumption
  • Expenses and services for individual cleanliness and beauty treatment and other personal items as well as expenses related to pets
  • Expenses related to information and education
  • All expenses for telephony and postal services
  • Expenses for health-related items and services
  • All expenses for training services
  • Expenses for social protection services
  • Expenses for other financial services