Interest rates 1,6% for bankers - 8% for ordinary mortals

Benefits at the lowest interest rates in the market are enjoyed by 11.000 bank employees when the business world and citizens are asking for cheap lending for both new and existing lending as well as restructuring.

The collective labor agreement, signed between ETYK, Bank of Cyprus and the member banks of the Employers' Association, highlights the fact that the banking privileges are consolidated despite the declared intentions of the banking administrations to be given in a rational way.

A bank employee to get a mortgage loan up to 85.000 euros pays an interest rate of 1,40% when the average purchase interest rate is 4,04%. This in practice means that the average citizen pays the mortgage more expensive by 2,64% compared to a bank employee.

The privileged situation experienced by thousands of bank employees, due to the contract of ETYK with the employer side, is in contrast to the interest rates that entrepreneurs are required to pay to the banks.

The average purchase interest rate for a business loan, according to Central Bank data, is 5,35%. The businessman in the best case is required to pay with a "hat" 3,95% of his loan in relation to a bank employee.

It is worth noting that the most expensive interest rate paid by a bank employee is the student loan and the overdraft that reaches 1,60%.

The comparisons of interest rates of bank employees if made with the interest rates paid by those who proceed with restructuring are even more unequal.

The difference in a mortgage loan can exceed 3,5% and for a business loan it can reach 7% to 8%.

The car loan up to 16.000 for a bank employee is 1,40%. The interest rates offered by the Bank of Cyprus for a car loan, for example, depend on the contribution and whether it is new or used. The market interest rate, depending on the case, ranges from 4,90% to 6,40%, percentages that show the difference between a bank employee and an ordinary citizen.

It is obvious that the banks are losing money from the granting of these loans, since the interest rates can in no case cover the cost of money from deposits and other financing of the banking institutions. Essentially, the loans are subsidized by the banks and translate into a payment of a significant part of the installments by the bank itself.

Another example that brings to the surface the differences with the terms that an ordinary citizen borrows in relation to a bank employee, is the student loan.

For the bank employee the interest rate is 1,60% to get a student loan up to € 35.500. In the market, student loans are offered at an interest rate of 5% to 6,20%, raising the preferential difference to 4,6%.

Cleaners also enjoy preferential interest rates compared to those paid by ordinary customers of credit institutions.

The interest rate for overdrafts of cleaners and bank employees is 1,60%. The average overdraft rate for a household is 5,78% and for an entrepreneur 5,48%. This means that the individual pays with a "hat" 4,18% the overdraft and the businessman with 3,88% in relation to the bank clerk and the cleaner.

Bank employees based on the ETYK contract also have the privilege for a loan that falls into the category of financing and is offered at an interest rate of 1,40%.

Source: Liberal