Appeal to consumers to choose a basic account for lower bank charges

Konstantinos Petridis and Konstantinos Herodotou received a barrage of criticism from members of the Parliamentary Committee on Trade, which discussed the issue of increased bank fees.

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An appeal to consumers to ask the banks to convert their bank accounts into a payment account with basic features, in order to benefit from the charge ceiling limited to € 36 per year, addressed the Minister of Finance and Governor of the Central Bank, adding that based on legislation there is no scope for intervention in other types of accounts.

The appeal of Konstantinos Petridis and Konstantinos Herodotus came after a rain of criticism from members of the Parliamentary Committee on Trade, which discussed the issue of increased bank fees. The debate will continue next Tuesday.

The chairman of the Commission, Kyriakos Hatzigiannis, called on the banks to freeze the increases "until a civilized dialogue is exhausted", adding that "they can not continue this cannibalism with a lack of respect".

He noted that the focus of the discussion on the bill of payments with key features, disorients from the fees imposed on other accounts of households and businesses. "This is not an approach, this is a deception," he added.

In its statements, YPOIK said that the decree issued in November 2020, set a ceiling on bank fees of € 36 per year in the Payment Characteristics Account (LPVX) per consumer.

He explained that under the decree there is no restriction on transactions for most services, such as opening, operating and closing accounts and depositing money, as well as a minimum number of transactions, amounting to 100 per year, for other payment services (direct charges , credit card payments, etc.) and which relate to services within the European Union and for amounts per transaction under € 5.000, while there are zero charges for withdrawing money from ATMs within the European Union, independent bank.

"I call on all consumers, if they have not already done so, to contact their banking institutions so that they can establish a basic account and can have basic accounts in more than one bank. From there on, together with the CBC, we will make sure that this legislation is implemented ", added Mr. Petridis, calling on the banks to explain to the world the issue of charges" because a peripheral atmosphere is created, which is not in favor nobody ".

The Governor of the CBC also called on consumers to convert their bills to LPVX, so that they can benefit from the ceiling of € 36 per year.

"Our fellow citizens should go to the banks and ask either to open this account or to turn the current account into an account for basic payments. "If they do this and can handle all kinds of transactions they already make with a maximum total charge of € 36 per year or € 3 per month," he said, adding that this is valid from 2020 and simply all of us or those consumers who wish make sure they apply to the banks to open this account.

Speaking before the committee, Mr. Herodotus said that according to the legislation (the Comparability of Fees, the Change of Payment Account and the Access to Payment Accounts Law of 2017), there is no obligation for banks to inform the CBC about the charges. and no violation was committed by the banks.

Responding to criticism that the CBC's investigation into the matter was kept confidential, Mr Herodotou said that the European Banking Authority (EBA), which conducts research across Europe, also kept the data confidential.

He noted that no other eurozone country intervenes in bank charges other than the base account and the European Payments Accounts Directive, adding that the study conducted by the CBC in 2019 focused on in LPVS.

As he mentioned, the CBC study on charges in other countries showed charges ranging between € 1,45 and € 6,67 per month, with the ceiling in Cyprus being set at € 3 per month or € 36 per year in LPVS. He said that in addition to the countries examined by EBA, the CBC examined data from Austria, Estonia, France, Lithuania, Slovakia and Slovenia.

He explained that the definition of the ceiling in Cyprus was made after an examination of the Cypriot GDP per capita and the selection of the average amount (median).

He noted that the LPVS concerns consumers and not businesses, saying that the law will need to be amended to cover legal entities.

Mr. Herodotus said that total applications have been made for 414.431 basic accounts for 420.345 customers (some have joint accounts), with only three applications being rejected.

He also said that an audit is carried out 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 ceiling of € 18 and € 20 per year which was below the ceiling of € 36 euros.

At the same time, representatives of the two main banks (Bank of Cyprus and Hellenic Bank) said they were not competent to answer whether the charges could be frozen, saying that such decisions are taken at the level of Boards of Directors.

The Bank of Greece's Director of Communications and Public Relations, George Sklavos, said that the bank had sent two million letters since last November informing about the new charges that were implemented yesterday, emphasizing that the fees for the IASB have not been met. change.

The main difference, he explained, concerned the savings account fee of € 5 per year, which becomes € 20 per year as various services are packaged that previously had a total cost of around € 17.

Note, however, that maintaining an account incurs costs due to supervisory requirements such as KYC (Know your client) procedures and updating them.

"There are hundreds of thousands of accounts with a balance under € 200 or € 300. "These accounts may be unnecessary but there is a cost to maintaining them," he added.

He also said that customers can apply online to change their account to a basic payment account, which is done at the touch of a button, he said.

AKEL MP Costas Costas spoke of "impunity, intimidation and arbitrariness" on the part of the banks. He reminded the closure of branches in the countryside and the queues that form outside the branches in the cities as a result of the reduction of the branch network, but also the weapons that the banks have at their disposal to take people out of their homes. "It is not possible to bleed the world," he said.

In statements after the session, the Parliamentary Representative of DIKO, Panikos Leonidou, criticized the banks, that they are taking advantage of "the dominant position they hold in the local economy and ignoring all state institutions, including the parliament, ignoring the increase , the prevailing socio-economic conditions, in the midst of economic crisis and pandemic ".

ELAM MP Sotiris Ioannou said the increase in charges in a period of harsh precision is unacceptable. "Today depositors are facing the immoral and inhuman face of the banking system," he said.

On behalf of EDEK, Elias Myrianthous, for his part, said that the banks that have been supported through the deposit cut should be careful about the way of charging. He also said that due to the charges, many of our fellow citizens have been taken to large banks in the occupied territories where they open their accounts.

Michalis Giakoumis, MP of DIPA - Cooperation of Democratic Forces described the increased charges of the banks as a "challenge and unacceptable action" and added that "if the banks have not understood, until today the House of Representatives and the citizens have turned their backs on to keep the banking system alive so that the economy and the whole chain can continue to work ".

On behalf of the Movement of Ecologists - Citizens' Cooperation, 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 double or even triple their charges, resulting again to be paid by the consumer ".