A new draft bill forcing conversion of forex loans will be ready by the turn of May/June, the Polish president’s office announced on April 13.

President Andrzej Duda has set up a panel of experts who will rewrite the original proposal for the conversion, after an estimate of the law’s cost forced his office to withdraw draft last month. Financial market watchdog KNF said that the proposal could cost the banking sector PLN67bn (€15.6bn).

One of the main tasks in designing the new legislation is to find a solution allowing lenders to spread the cost over several years, the president's office said.

According to earlier reports, the new version of the law could include an order to the central bank to lend commercial banks capital to cover the cost of the conversion. Lenders could have 20-30 years to pay the National Bank of Poland back.

Duda promised a scheme to force conversion in his successful election campaign in May. The populist measure - which reflects similar moves in Hungary and Croatia in recent years - seeks to help the 550,000 or so Poles that took out mortgages in Swiss francs ahead of the financial crisis. Borrowers saw their installments spike in January 2015 as the Swiss central bank removed a cap to the euro on its currency.

However, the KNF’s estimate forced Duda to withdraw the original proposal, tabled in mid-January, and go back to the drawing board. Poland's Financial Stability Committee – a body composed of the KNF, the central bank, the finance ministry, and the Banking Guarantee Fund - is to meet on April 18 to discuss the issue.

Originally, President Duda proposed that borrowers be allowed to make payments on their CHF-denominated loans at a “just exchange rate,” which would be reached by a comparison of the cost of the forex loan compared with a zloty loan. The cost of the original proposal added to the worries of Polish banks, which posted a 25% fall in net profit in 2015 on the back of increased payments into the sector’s stability funds, as well as record-low interest rates. It is not clear how conversion spread over several years would impact profitability.