Insider Business Putting a ceiling on specific bank charges a possibility

Putting a ceiling on specific bank charges a possibility

The Central Bank of Cyprus is reviewing fees imposed by commercial banks and may put a ceiling on four basic services provided to clients, Phileleftheros reports.

In fact, this could be among the recommendations CBC Governor Constantinos Herodotou will make to Finance Minister Constantinos Petrides whom he is meeting next week. Putting a ceiling requires the issue of a Ministry decree.

The Law on Comparability of Charges stipulates that basic services which could come under the ceiling are: all transactions required to open, operate and close a payment account, services that allow funds to be deposited into a payment account, services enabling cash withdrawals from a payment account within the European Union. That is, through a customer service fund or through automated teller machines during or outside operation  hours of financial institutions.

In addition, a ceiling could be put on the following payment transactions within the Union: direct debits, card payment transactions, including online ones, credit transfers, including standing orders, if any, and customer service funds and online credit facilities of financial institutions.

The law allows the Central Bank to decide whether charges for the above services are unreasonable and to also demand amendments. This issue is expected to be clarified next week with the Governor’s recommendations to the Minister after taking into consideration the impact on the balance sheets of banks.

Meetings between Herodotou and bank executives are also on the cards, according to informed sources. Central Bank technocrats are currently comparing fees for same services available at banks in other countries. And their conclusion is that there are differences either up or down compared to those of Cypriot banks.

An informed source also said that after the comparative data is submitted to the Minister, he will proceed, or not, with the issue of a decree.

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