Nicosia, Cyprus. The Central Bank of Cyprus on Friday announced that the reference interest rate under article 314A of the Cyprus Criminal Code has been set at 11.72 per cent.
Reference rate and its purpose
The CBC said the rate is determined in accordance with provisions governing lending practices and financial transactions. It added that the reference interest rate serves as a benchmark for assessing legality in lending agreements.
Offense and penalties
The central bank said that a person who, when providing any loan, extending the payment term, renewing or discounting a loan, receives, collects, charges, stipulates or takes for personal benefit or on behalf of a third party financial benefit or property benefits exceeding the reference interest rate commits an offense. The CBC said that, in case of conviction, the person is liable to imprisonment of up to five years or a fine of up to €30,000, or both.
How will the 11.72 per cent reference interest rate affect your assessment of loan terms?