The low-interest loans were part of the collective agreement bank employees' union ETYK had negotiated on its members' behalf, but the bank decided to cancel its contractual obligation with regard to several loan categories, the
According to the collective agreements, employees who belong to ETYK were entitled to seven types of loans with preferential terms for housing (up to €85,000 at a borrowing cost of 0.56 per cent), buying a car (up to €16,000), wedding (up to three monthly salaries), employing cleaners (up to four annual salaries) and general expenses (up to €17,000), all but the first type at 0.83 per cent. Bank employees were also eligible to apply for a student loan up to €35,000 at 0.97 per cent, as well as an interest-free loan to help them acquire the
In a memo to the Ethics committee, which was conducting an investigation into the root causes of the banking sector's meltdown,
"Fully recognising the public outcry and exemplifying its resolve for the equal treatment of all clients, especially in light of the March developments,
The union challenged the decision by submitting an appeal with the Labour ministry's mediation services, which ruled in ETYK's favour in
The ministry's decision notwithstanding, the bank refused to change its position and announced "in every direction" that consolidation will be achieved by "substantive action and not peripheral declarations."
The BoC has informed both parties of its decision, reportedly because the bank's management does not wish to commit to any agreements between KEST and ETYK.
Considering that current challenges facing it in terms of its recovery differ immensely to those of other banks, the bank feels it needs to be allowed greater flexibility in dealing with labour issues.
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