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Wednesday, January 19, 2022

The debate over bank charges is widening

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The debate over bank charges is widening

Eleftheria Paizanou

Banks are required to open or convert bank accounts into a Payout Account (LPL) at the request of consumers, provided they no longer maintain a similar account elsewhere.

During yesterday's debate in the Parliamentary Committee on Commerce, regarding the increases in the banks' charges, the Governor of the Central Bank, Konstantinos Herodotou, was clear, stating that the bank is obliged to open an IBRD to anyone who requests it or converts an account into a bank account. not to maintain another such account in another bank. In fact, he noted that in the event that consumers maintain another LPVX, the bank may not agree to open a second such account.

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According to the Governor, the Central oversees the charges for the specific accounts, noting that for 2021 there was no violation. Mr. Herodotou noted that the Central Bank did not receive any complaints from consumers who received a negative response from the banks for connecting the LPVX with a debit card. In fact, he cited data, according to which, at the end of 2020, there were 412,431 LPVX, which were maintained by 420,345 thousand consumers, while for 2021 there may have been an increase.

Herodotus reacted

The Governor of the Central Bank reacted strongly to the statements of the president of the Cyprus Consumers' Association, Marios Drousiotis, who referred to the need for greater intervention by the Central Bank. As he said, the ceiling for charges in the payment account with basic features could be at € 24. In this, said the Commander, the CB acts according to the laws and not with theories. He pointed out that the study prepared by the Central Bank in 2019 in collaboration with the Single Supervisory Mechanism and the central banks of other countries, resulting in € 36 the maximum charges imposed by decree of the Ministry of Finance. Finally, the Governor assured the members of the Committee that he is in an open line of communication with the legal advisor of the Central Bank, in order to submit to the Parliament the relevant study, which includes some confidential information.

Banks answer

Meanwhile, yesterday, the members of the Commission addressed a new call for a freeze on the increases imposed by the banks. As it is known, from the 3rd of the month the Hellenic Bank has imposed the increases in the bank charges, while on the 15th of the next month the Bank of Cyprus will apply them.

The Director of Communication and Public Relations of the Hellenic Bank, George Sklavos, stated that the request for suspension of the new charges to the bank has been transferred, but no decision has been taken yet by the board. and referred to the placements he made last week.

The Director of Retail Banking of the Bank of Cyprus, Theodosis Theodosiou, noted that the bank's board has not yet taken a position on the request of the Parliament. At the same time, Mr. Theodosiou pointed out that the increases are within the decree of the Ministry of Finance and within the law. He pointed out that the increases imposed by the bank fall into two categories of charges. The first category concerns the costs of managing accounts and the second the costs of managing checkbooks. He claimed that the relevant increases were imposed due to the high cost of maintaining the accounts, stating in particular that the operating costs and staff costs amount to € 42 million, while the costs for the computer upgrade amounted to € 10 million. Theodosiou, the bank maintains about one and a half million accounts, noting that the expenses per account amount to € 34.

Concluding, he stressed that for students, retirees and recipients of EEE no charges are imposed on the account, with the exception of management costs. Meanwhile, representatives of RCB Bank, Astrobank and Eurobank Cyprus stated that they have not increased the relevant charges nor do they plan to proceed with increases.

Consumers' associations and social partners also expressed their dissatisfaction with the increase in bank charges.

The parties are looking for a legal formula
The members of the Trade Committee are looking for the legal formula with which the services offered through the LPVX will be extended, but also for the benefit of small businesses. The parties will submit relevant bills, which are already being drafted. On this issue, the Governor stated that the CB is ready to cooperate, provided that any amendments are in line with European directives.

The chairman of the committee and MP of DISY Kyriakos Hatzigiannis stated that the Parliament will put an end to the opaque practice of the banks, proceeding with differentiation of laws, not only for the accounts with basic characteristics, but also for the protection of the consumer.

AKEL MP Costas Costa, expressed his readiness to submit a bill and complained that banks buy check books for € 2.5 euros only and sell them for € 20 and € 30. DIKO MP Chrysis Pantelidis noted that banks are the only place where the customer is not always right. Environmentalist MP Stavros Papadouris complained that, in addition to the existing charges, the banks impose other charges, which are not described in advance to the customer.

Source: www.philenews.com

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