Filenews 29 December 2021 - by Theano Thiopoulou
Political parties, the Cyprus Consumers Association and the Association for the Protection of Bank Borrowers (SYPRODAT) are looking for ways to react to the increase in bank charges that will apply from the beginning of the year, while answers regarding the resulting reactions are given by the Central Bank in its announcement.
As "F" wrote a few weeks ago, on January 3, 2022, Hellenic Bank's new charges come into effect and customers have been informed since the beginning of November about the changes that will be made. One and a half months later, on February 15th, the bank of Cyprus' new charges come into effect and its customers were informed about the new pricing policy from 16 December. As the new charges approach, reactions are sparking, the first of which began through the association of consumers and borrower protection, to be followed by the parties and late yesterday by the PEO. From the explanations given, both by the Central Bank and by sources of Hellenic Bank, the necessity arises for customers to keep an account, the basic one, and to use electronic transactions, with little to no burden, instead of maintaining many accounts, at a significant cost.
How the Central Bank responds
Yesterday, the Central Bank, after the noise created, notes in its announcement that it will study the issue of increases in charges of Cypriot banks, which have been reported in the press and will take any appropriate actions within the framework of its competences. The Central Bank says that it has carried out and submitted a relevant study to the Ministry of Finance in February 2020, through which a specific package of measures was proposed regarding the charges levied on payment accounts with basic characteristics (ESBX) and which package of measures has been adopted in its entirety, through the issuance of relevant decrees in August 2020. It is also noted that, according to the legislation in force, the power of the Central Bank to intervene in the pricing policy of credit institutions is limited to the submission of a proposal to the Ministry of Finance for the cleaning of reasonable fees on payment accounts with basic characteristics.
The above-mentioned package of measures includes, inter alia, the introduction of a maximum charge (cap) of €36 per calendar year on charges applied to specific services, which are offered through ESBX (payment accounts with basic features), as well as the imposition of zero charges for cash withdrawals from RICS via ATMs in Cyprus, as well as throughout the territory of the European Union. They also set zero charges specifically through these decrees for consumers who are considered vulnerable, as determined by the relevant ministry. If the consumer, notes Central, handles a low number of transactions or if he chooses the online route for processing transactions, then the amount he will have to pay will be clearly less than €36.
On the decree basis the changes
The changes that have been announced in the bank charges are based on the decree of the Minister of Finance, stress sources of Hellenic Bank, underlining that in no case are the changes contrary to the decree. They note that Hellenic Bank offers the Basic account, giving its customers the opportunity with €1.50 per month to maintain an account and debit card to meet their daily needs. Also, they can be served easily and quickly by the bank's alternative channels, make free withdrawals and deposits, transfers, standing orders and execution of outgoing SEPA remittances (within European Union countries), up to €1,000, through Hellenic Bank Web Banking and the Mobile App, without any limit on the number of transactions. This account is available free of charge to EIO recipients and other vulnerable groups. The changes, Hellenic Bank sources note, were decided with the aim of simplifying and packing banking services, urging customers to keep as many accounts as they really need. Maintaining and managing an account, it is added, incurs costs for banks. In addition, based on the changes, free withdrawals in euro from any ATM in Cyprus and abroad will also be made by savings account holders. Customers, indicate sources of Greek, can either open a new account and / or convert one (or more) existing savings account into a Basic account, in one of the branches or through Web Banking.
The 'basic' account covers ordinary transactions, such as deposits, cash withdrawals, collection and payment of payments (e.g. direct debits and card purchases). By opening such an account, the customer is also entitled to a payment card which he can use to withdraw money and pay for purchases made either online or at the stores. The bank must provide access to online banking services through the account. However, they are not obliged to provide you with overdraft facilities or other credit facilities.
CONSIDER THE INCREASE IN CHARGES TO BE UNTIMELY AMID ACCURACY
The parties reacted as did trade unions and since yesterday they have made statements on the issue of increases in charges. AKEL characterizes the increase of bank charges as a challenge, stressing that there must be an effective response to the new increases in banks' charges, calling on the government and the Central Bank to act immediately.
EDEK welcomed the intervention of the Central Bank, noting, however, that in order for these interventions to have an effect, it is imperative that these interventions be made in cooperation with the Government and that they must be particularly strict.
Peo expressed its strong protest against the impending new increases in bank charges in a statement. "It is imperative to put a stop to the unaccountability of the banks, which continue untouched their unacceptable policies and we ask the institutional bodies to exhaust all the possibilities offered by the legislative framework and the Decree issued by the Ministry of Finance itself, for the protection of consumers, who become prey to the oligopoly of banks", argues PEO.
Banks' main new charges
In Elliniki, one of the changes that will be made concerns the costs of maintaining a savings account / account. The annual existing charge is €5, with the revised charge becomes €5 per quarter. For 7-day notice bills, the existing charge is €1 per month and for notice bills beyond 7 days €5 per year. With the changes, from January 3rd, the charge is €5 per semester. There will also be changes in the pricing of deposits and concerns all customers of Hellenic Bank who are natural persons and professionals, excluding accounts of minors. In some cases of deposits there will be a negative interest rate.
At the Bank of Cyprus, the main changes for natural persons concern the increase of current management costs with a margin of overdraft. The charge per quarter will be €12 from €6 for an amount up to €3,000 and €20 from €10 for an amount up to €10,000. Categories up to €500,000 are added, with a quarterly expense charge of €250 and over €1 million. with expenses of €500. Savings account management fees are set at €5 per quarter, instead of the zero charge that currently exists, for customers between 26 years of age and 65. The notice account management fee will be €2 per quarter, instead of a zero charge.
