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