Cyprus Mail

Plenum to vote on abolishing some bank charges

The House plenum will next week vote on abolishing unfair bank charges.

Chairman of the House Commerce Committee DISY MP Zacharias Zachariou on Tuesday said the last details of the bill have been ironed out and it will go to a plenum vote on March 17.

The bill abolishes a number of charges banks impose on borrowers, including a fee to look over the loan application, a fee to monitor the loan transaction history, an insurance fee, added interest rates and other hidden fees. The bill also requires the banks to calculate interest rates at 365 days or 366 days in a leap year and not at 360 days, which is the current practice.

The bill also stipulates that the bank is no longer allowed to unilaterally demand of the borrower to pay off the entire loan, barring special circumstances.

The bill was drafted by main opposition party AKEL and DIKO. AKEL MP Yiannakis Gavriel called on the government to “stop catering to the banks and start listening to the people”.

Gavriel asked all borrowers who believe that they have fallen victim to unfair bank charges to present their case to the Office of the Financial Ombudsman so they can have an additional defence on their side in case they decide to take the case to court.

DIKO MP Angelos Votsis said that the bill aims to protect borrowers from unfair bank charges.

Zachariou clarified that the bill doesn’t extend to loans in foreign currency and that it will not be retroactive. He was referring to the case of borrowers who converted their loans to Swiss francs in exchange for lower interest rates. Following the financial crisis the exchange rate changed leaving many of the borrowers with huge debts.

Greens MP Yiorgos Perdikis said that he didn’t believe that the bill will pass, claiming that it “smells of referral”.

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