Banking Law

Services offered to Banks:

Banking & other Financial Institutions Law has been the core business of our Law Firm for many years. In recent years these services have expanded to cover legal compliance and legal risk management. Legal compliance has inevitably become part of the Risk Management, in the sense that the policies and documents of the bank need to be consistent and in compliance with the law. Compliance itself and many of the myriad regulations, that are enforced through compliance operations, are explicitly grounded in the risk assessment and risk management procedures.

The importance of the legal input in all levels of operation of a banking organization is growing stronger as time passes. Directives and Legislations that keep changing, have caused a continuous increasing need for legal input. Furthermore, the financial environment worldwide, is becoming more regulatory as time passes. In Cyprus there are provisions, in a rather high number of law/regulations/directives, which relate to issues that banks should comply with. As aforementioned, it should be noted that complying with the aforementioned is an ongoing process as these provisions change at times.

A Bank which does not comply with the relevant Law/Regulations/Directives faces the following risks:

(a) Imposition of high fines by Regulatory Authority: a right is given to the Central Bank for non-compliance with the provisions by a relatively large number of laws.

(b) Appointment of Administrator: a right is given to the Central Bank for non-compliance with the provisions of several laws.

(c) The Banks' officials bear the risk of arrest and prosecution: a right is given to the relevant government authorities for non-compliance through a number of laws. An example is anti-money laundering legislation.

(d) Reputation risk: associated with the aforementioned.

(e) Reputation risk bears in itself other risks, such as termination of relations with the correspondence banks abroad, expulsion from money transfer platforms, etc.

(g) If a facility is non-performing and legal action is taken, but the bank had not complied with the law when the loan was granted, or during the loan restructuring procedure, either in relation to documentation provisions or otherwise, this could lead to successful court defenses which would result in losing the case.

All of the above could lead to financial loss or even financial disaster for the bank.

Our firm makes sure that Banks' documents and policies comply with the laws/regulations/directives of the Republic of Cyprus and are updated for any amendments that affect their operations.

At the moment the following services are offered:

  • Assistance to Audit: providing legal advice to the internal audit team or making reports to a risk committee on particular areas of legal risk, identified during that team's work.
  • Drafting of banking credit, collateral and other agreements / documents.
  • Proactive support: Training/Seminars to bank officials on specific issues.
  • Negotiation and Complex Restructuring solutions for loans in arrears.
  • Gatekeeping: giving legal approval at particular stages in a project.
  • Briefs on Legislation/Regulations and impact identification.
  • Preparation of banking manuals.
  • Debt Collection.
  • Legal Opinions.
  • Due Diligence.

We would like to humbly point out that the fact that we have been also dealing with debt collection for a number of credit institutions for a considerable number of years, has given us an advantage in the legal work mentioned below, since a banking practicing lawyer with court experience who is familiar with court cases and faced the various defenses in court, may see things from a more integrated perspective, thus giving more complete and better solutions.

Services offered in relation to private clients:

Our Law Firm is in position to offer professional and impartial advice to individuals/corporations dealing with Banks/Financial Institutions which are not its clients, in relation to high amount loan/collateral banking agreements, bankruptcy, insolvency and other related matters.