Insider / ΚΥΠΕ
A new service for Financial Ethics, which receives consumer complaints, has been created within the Central Bank, said the Governor of the Central Bank, Konstantinos Herodotou today.
Mr. Herodotou was answering a journalist's question about consumer complaints about the basic payment accounts, on the sidelines of the signing of a collective agreement between the Central Bank of Cyprus and ETYK.
As he mentioned, a new service for Financial Ethics has been created within the Central Bank, which has not received any reports from citizens for refusal of banks to open basic payment accounts.
The Governor stated that, according to the legislation, banks are required to open at least one basic payment account per consumer, not per bank. “If a fellow citizen does not have an account, the bank has no right to deny it,” he said. However, he added, he is not obliged to open a second account. To change this, legislation needs to be amended, which is not a matter for the Central Bank.
He clarified that the essence of the relevant legislation concerns the accessibility of consumers to a bank account, regardless of financial capacity. He added that the information gathered by the Central Bank from banks in the rest of Europe and from the SSM showed that the fluctuation of the total charges reached up to € 84 per year, for this type of accounts. The Central Bank also took into account the Gross Domestic Product per capita and suggested € 36 per year as a maximum charge, which is below the EU average. With this € 36 the consumer can do all the basic functions: use it ATMs, payment of utility bills, transfers between banks in Cyprus and Europe via SEPA.
Asked about the control of banks' pricing policy, the Governor said that the state laws allow interference in only one type of account, the basic payment account, which the CBC has been studying since 2019. “Banks are private companies “Central has no authority to impose anything on the other charges of the banks”, he stated.
Asked about the course of the Cypriot banking institutions during the pandemic, he said that the measure of suspension of installments planned in the CBC in cooperation with the Ministry of Finance was something that helped the banks and the economy and households. “It gave a 'time-out' on both sides in the midst of a pandemic to bring some kind of normalcy and restart the flow of money,” he said. He even said that the results at the end of the moratorium exceeded expectations. He added that the current situation of the Cypriot financial institutions is very good both in terms of liquidity and in terms of capital adequacy.
Asked about the profitability of banks, he said that profitability is not only business but also a European challenge. It is an issue that is also being discussed at the level of the Governing Council of the European Central Bank, he added. But it is also a matter for the management of each bank to find ways to increase profitability, he said. From a supervisory point of view, he noted, the CBC evaluates the business plan on a three-year basis to ensure the soundness of the banks. “With the current data, there is no problem with any bank,” he noted.
