The position of the National Bank in the beginning of 1926 was not at all enviable. From July of the previous year it had frozen its payments, but continued to lose its fictitious covers, since the Committee for Refugee Settlement withdrew money from its account. Depositors, who were prompted by the increased demand of money, did the same. Under these circumstances the Bank's administration proposed a forced loan to the government as the only feasible solution to its economic impasse, which had an impact on the entire national economy. With its reserves depleted due to public sector crediting (mainly for refugee rehabilitation works), the Bank was unable to continue its financing and the business sector had been deprived of its most important source of borrowing.

The new forced loan was implemented in the following way: All banknotes (except for deposits) starting from 50 drachmae and more were divided in two. The first represented 3/4 of the total and continued to function as paper money, while the residual 1/4 was converted into a government bond of a twenty-year duration with a 6% annual interest rate and a right of participation in a lottery. In order to avoid the reasonable comparisons with the previous forced loan of the Protopapadakis government in 1922, the undersecretary of Finance explained to the public sector "lenders": "as we know, the product of that loan [of 1922] was destined for and dissipated in military needs, while the current one is granted by the National Bank to productive units preferably". The loan was a measure affecting the less wealthy social groups. This happened as their buying power was decreasing proportionally (by 25%). Because their saving ability was limited, they did not deposit money in the bank, but kept their savings at home.

From the total loan proceeds of 1250 million, 661 million were allotted to the National Bank against the floating debt and the rest to cover current needs of the public sector. One of the consequences of this policy was the limitation of monetary circulation. In the beginning of January 1926 circulation reached 5339 million and the rate of the pound was equal to 378 drachmae. By the end of the month, circulation had dropped to 4195 million and the rate of the pound to 343 drachmae.