Filenews 5 January 2022 - by Theano Thiopoulou
Without being able to make many substantial interventions to determine the bank charges or to suspend the imposition of the new ones announced weeks ago, both the Minister of Finance, Konstantinos Petrides, and the Governor of the Central Bank, Konstantinos Herodotou, argued yesterday in Parliament that the only solution offered under the current circumstances is for consumers to contact their banking institutions to determine a basic account, in order to ensure, if nothing else, that the maximum charge that this bill will have, for a wide range of services, will be €36 per year.
However, this exhortation does not seem to allay the concerns of MPs, even from the government faction, nor of consumers, organised or not, as the increased charges cover a wide range of services and are expected to affect a large portion of customers, individuals and legal persons. On the other hand, it appears that a large number of consumers keep, unnecessarily, many bills and are subject to unjustified costs.
Yesterday, the issue was discussed urgently in the parliamentary Trade Committee, on the occasion of the reactions that resulted from the new pricing policy of Hellenic Bank, which entered into force on January 3rd, and of the Bank of Cyprus, which is expected to enter into force in February.
Both the minister and the governor appealed to consumers to ask banks to convert their bank accounts into a payment account with basic features (one in each bank), so that they can take advantage of the charge cap limited to €36 euros per year, based on a 2020 ministerial decree. They explained to MPs that under the law there is no room for intervention in other types of accounts and referred to the decree, which merely sets a ceiling on bank fees, amounting to €36 per year, only for the payment account with basic features (EKBBX).
The Minister of Finance asked the banks to inform and explain honestly to the citizens the new increases in banking transactions, as such explanation/justification, official, has not been so far, apart from the announcement of the new charges made by the two banks, addressing directly, in millions of letters, their customers. Mr. Petrides cited the following practical steps, which can be followed by bank customers, to reduce their cost in terms of charges for the banking services provided to them.
- Customers use a basic account to carry out their transactions so as to reduce the fees they will pay.
- Any payments, especially to utilities, should be made through the basic account, so as to essentially minimize any charges.
- As for vulnerable consumers, he said that they should use for their basic transactions the account in which their salary /pension is deposited or any benefits, so that they are beneficiaries of the zero charges.
Hellenic Bank
Hellenic Bank's Director of Communications and Public Relations, George Sklavos, said the bank had sent two million letters since last November, informing about the new charges that were implemented yesterday, stressing that the fees for the EKBX have not changed, i.e. they remain €1.50 per month.
The main difference, he explained, concerned the fee for keeping savings accounts, which was €5 per year and becomes €20 per year after various services that previously had a total cost are packaged. He said customers can online request that their account be modified to a basic payments account, which is done at the click of a button.
CENTRAL: IN NO COUNTRY DO THEY INTERFERE WITH BANK CHARGES
Speaking before the Trade Committee, Konstantinos Herodotou said that under the legislation (the comparability of fees, payment account switching and access to payment accounts law of 2017), there is no obligation for banks to inform the Central Bank about the charges and there was no violation by the banks. Responding to criticisms that the central bank's investigation into the matter was kept confidential, Mr Herodotou said that the European Banking Authority (EBA), which is conducting a pan-European investigation, also keeps the data confidential. He noted that no other euro area country interferes with banks' charges, apart from the basic account, on the basis of the European Directive on the comparability of payments accounts directive and added that the study conducted by the CSC in 2019 focused on the CPMP. He noted that the ESMP (basic bill) concerns consumers and not businesses, saying that it will be necessary to amend the law to cover legal entities as well. Mr. Herodotus also said that total requests have been made for 414,431 basic accounts for 420,345 customers (some have common accounts), with only three applications rejected. He also said that an audit is being done and covers the day the decree was issued, adding that previously a bank, which he did not name, exceeded the charge of €36, reaching €46 per year. He noted that the two major banks had a cap of €18 and €20 per year, which was below the €36 euro ceiling. The representatives of the two major systemic banks (Bank of Cyprus and Hellenic) said they were not competent to answer whether the charges could be frozen, saying that such decisions are taken at the level of the Board of Directors.
| Angrily... MPs on banks |
Inside and outside the session of the Parliamentary Committee on Commerce, heard for good from MPs, even from the ruling DISY, about the new increased charges from Hellenic Bank and Bank of Cyprus.
Particularly harsh was the statement of the chairman of the committee, FAMAGUSTA MP of DISY, Kyriakos Hatzigiannis, who called on the banks to freeze the increases "until a civilized dialogue is exhausted", adding that "they cannot continue this "cannibalism", with a lack of elements of respect". He also noted that the focus of the discussion on the payment account with basic features, disorients from the fees imposed on the rest of the accounts of households and businesses. "This is not an approach, this is a deception," he added.
Very strong in his statements was also the MP of Limassol of AKEL, Kostas Kostas, who, however, extended his criticism towards the government. He said, among other things, that "the unaccountability of the banks continues with the full coverage of the government. Frankly, they have escaped and it is obvious that they are doing what they want at the expense of the citizens, without the competent institutions - such as the Ministry of Finance and the Central Bank - taking measures, leaving consumers without protection.
According to Mr. Costas, "banks do not count any because:
"- The government made sure to close, sell off the Cooperative and give it to one of the 2 most big banks in the country, a huge scandal, as stated in the findings of the investigative committee, which remains unpunished.
- The majority of the House in July 2018, unfortunately gave the banks all the weapons to act as they want and especially to be able to seize the properties of the people such as the removal of the borrower's right to go to court to save his house and electronic divestments."
He said that banks "are constantly closing branches, with the result that in the countryside the elderly cannot be served and in urban centres we have queues of dozens of people waiting to be served in the cold, wind and heat".
The parliamentary representative of DIKO, Panicos Leonidou, called the new charges "unilateral and abusive". He also said that "the banks, taking advantage of the dominant position they hold in the economy of the country and ignoring all the institutions of the state, including the Parliament, ignore with the increases, the socio-economic conditions prevailing, in the midst of the economic crisis and the pandemic. At the same time," he said, "due to legislative gaps and limited control by state institutions, banking institutions create new inequalities and problems, which in the end will be the beginning of a discussion of all issues concerning the way and the means used by banks in their relationship with consumers."
ELAM MP Sotiris Ioannou said that increasing charges in a period of harsh accuracy is unacceptable. "Today depositors face the immoral and inhuman face of the banking system," he said.
On behalf of EDEK, Elias Myrianthous said that banks, which have been supported through the haircut of deposits, should be careful in terms of how charges are imposed. He also said that due to the charges, several of our fellow citizens have been taken to large banks in the occupied territories, where they open their accounts there.
Michalis Giakoumis, MP for dipa – Cooperation of Democratic Forces, described the increased charges of banks as "a provocation and an unacceptable action".
On behalf of the Movement of Ecologists, Stavros Papadouris said that in addition to the basic payments account, where there is a ceiling of €36 per year, banks "arbitrarily proceed, in some cases, to the doubling or even tripling of their charges".
