Bank of Cyprus, the island’s largest lender, has decided to change its fees and commissions for services for the first time since 2010 in an attempt to divert more business from traditional banking to online banking.
The new fees and commissions which will become effective on October 17, are included in a 16-page catalogue sent to the bank’s customers earlier this month. “We will consider that you have accepted the revised catalogue unless you notify the bank before it becomes effective and notify the bank that you wish to terminate your accounts without any extra charge if your accounts are covered by the Law on Payment Services (Current Accounts, Saving Accounts, Cards and Alerts),” Bank of Cyprus told its customers in an accompanying letter.
“We remind you that you can reduce your transaction costs by using alternative service channels”.
The decision of the bank, which pursues a listing at the London Stock Exchange and reduced its staff levels by 350 in the first half of the year from over 4,300 in December 2015 via a repeatedly revised voluntary retirement scheme, will not affect the interest rates, a source said on condition of anonymity.
Considerations related to the bank’s environmental footprint, transparency, changing technology and need to reduce costs for smaller enterprises were behind the decision to change charges covering the entire range of the bank’s services, he said.
“The increases, which are isolated, mainly refer to two categories of services,” the source continued. “Firstly, those that do not appeal to customers with small balances or volume of business, and secondly, those who can be served electronically through newly available service channels. Through these channels, service is cheaper or free, more transparent, faster and more environmentally friendly, while offering more control to the customer”.
The source said that Bank of Cyprus customers should expect “no significant increase” in transacting with the bank. “For example, if you have a current account with an overdraft limit of €8,000 you will be additionally charged about 30 cents per month,” he said adding that the quarterly saving for a client with a €2,000 limit will amount to €1.
A comparison of the current list of fees and commissions with the one that becomes effective in less than two months shows that Bank of Cyprus will customers €3 every quarter if with their current account (overdraft) limit is up to €3,000, €5 per quarter in the case of accounts with a limit of up to €10,000 and €35 per quarter for limits up to €100,000. Currently, Bank of Cyprus customers pay €4 every three months for limits up to €10,000 and €30 for limits up to €100,000.
Customers with limits of up to €1m will be charged from October 17 onwards €200 and those with limits over €1m will be charged €500 every quarter compared to currently €130 and €250 respectively.
Bank of Cyprus will also charge its customers €15 for the issue of a cheque book or €5 more. Orders to stop cheque payments will cost €10 per cheque and €25 per order instead of €8 and €20 respectively, while the service will be free of charge for users of the Bank of Cyprus’s “1bank” online and mobile phone banking service. In addition, the bank will charge 0.2 per cent or at least €5 for the redemption of cheques issued by customers of other commercial banks.
The Bank of Cyprus source said that the changes are likely to affect customers serviced at its International Business Units.
“This is primarily due to the increased costs of servicing the specific customers” caused by anti-money laundering controls, security of transactions, extensive service hours and employment of multilingual staffers to address the needs of Russian and Chinese speakers, he said. “We have invested in in infrastructure and in new procedures in order to provide a high level of service to our customers who are primarily non-Cyprus residents doing business abroad”.