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They go for key accounts and businesses

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An increase in demand for this type of account has been observed, reaching around 2,000 in 2022

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<p>An effort is being made to enable small and medium-sized businesses to open payment accounts with basic features in banks, corresponding accounts that are currently used by consumers in Cyprus, i.e. natural persons. The ultimate goal, as the MPs state, is the protection of consumers and this will be achieved by expanding the definition of the scope of consumer protection beyond natural persons.</p>
<p>According to the corresponding decree concerning natural persons, at the end of 2020, a maximum fee of 36 per year in a Payment Account with Basic Features (PSA) per consumer, without limitation of operations for most services (opening, operating and closing account as well as depositing sums of money), as well as a minimum number of transactions, which amounts to 100 per year, for the rest of the payment services (direct debits, payments via credit card, etc.) and which concern services within the European Union and for amounts per transaction under 5 thousand euros. Among other things, the decree referred to the zero charge for withdrawing money from ATMs within the European Union, regardless of the Bank, but also the zero charge for the minimum number of transactions, for which banks will charge only reasonable fees to all Recipients of Minimum Guaranteed Income.</p>
<p>The Cyprus Banks Association, with a note submitted to the Parliament, expresses its opposition to the extension of the measure to small and medium-sized companies.</p>
<p>According to data collected by “K” from a large bank that also has a large presence in retail banking, the measure of opening accounts with basic features has been “embraced” by consumers. An increase in the demand for opening basic accounts has been observed, since 600 were opened in 2021, while in 2022 approximately 2,000 accounts were opened. By February 2022, a total (not just basic features) of about 25,000 accounts had been opened.</p>
<h3 class=Link disagrees

The Cyprus Banks Association, with a note submitted to the Parliament, expresses its opposition to the extension of the measure to small and medium-sized companies. According to his written note, he disagrees with the expansion of the definition of the term “consumer” to include very small businesses, shareholders of very small businesses, as well as self-employed persons in the course of their professional activities, and the possibility of maintaining a payment account with basic features in more than one credit institution. The Association emphasizes that the intervention in the existing Law, which harmonized the national law with the European Directive (2014/92/EU), will put the domestic Credit Institutions (PI) at a competitive disadvantage in relation to their respective PIs. I. in the European Union (EU). At the same time, from information requested and received from 22 EU member countries. (in a total of 27 Member States), it has been confirmed that the opening-maintenance of a Payment Account with Basic Features (PSA) is valid only for Natural Persons and only for a PSA in a P.I.

He emphasizes that the main purpose of the Directive is to prevent the discrimination and exclusion from basic banking services of specific categories of natural persons such as asylum seekers, persons who do not hold a residence permit, persons without a fixed address and persons whose deportation is impossible for legal or factual reasons. In preamble 12 of the Directive, the Association adds that it is expressly stated that accounts maintained by businesses, including small or very small businesses, with the exception of those under personal status, should not fall within its scope. “Therefore, the enactment of such legislation will be subject to review in terms of its constitutionality and in terms of its compatibility with the acquis communautaire,” he notes characteristically.

The Association also raises the issue of “unequal treatment”, saying that the modification of the definition of “consumer” and the inclusion of only certain businesses raises questions as to whether it creates unequal treatment of other businesses that are not covered and violates the acquis communautaire, as it creates a favorable environment for Cypriot businesses and distorts competition in the single market.

The details

It is recalled that each consumer/customer can determine a basic account (LPVX) regardless of the number of credit institutions it cooperates with. The main account (LPVX) can also be a joint account, but it cannot be an account that is linked to any credit facility (e.g. current account limit, credit card, etc.). It is noted that, according to the acquis communautaire, apart from the basic accounts (LPVX), the other charges of the banks are up to the policy of each credit institution and the Minister of Finance has no right to intervene in their determination.

Source: www.kathimerini.com.cy

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