Lenders choose carrot-and-stick approach for debtors

Greek banks are pursuing a policy of carrot and stick regarding debtors, depending on the latter's attitude toward the settlement of their arrears: For those who refuse to cooperate, the banks are preparing auctions of their assets; for those who choose to cooperate and have their debts arranged, they are offering generous haircuts on their dues; and the lenders are now offering rewards to those who consistently service their debts.

After National, reward programs are now being adopted by Piraeus, with Eurobank and Alpha set to follow suit. Among other incentives, they will provide cash returns to those who have not missed payments despite the difficulties during the financial crisis.

Borrowers who cooperate will enjoy discounts that will reach up to 80 percent for consumer loans, and up to the level of the market value of the property used as collateral for a...