Bank of Cyprus backs down on charges hike after public outcry

Following public pressure, Bank of Cyprus has postponed introducing increased customer charges for transactions carried out with counter assistance at its branches.

The new increases were dropped in the wake of bad publicity after MPs campaigned against what they deemed to be “merely punishing consumers who do not have the skills or the means to carry out their transactions online”.

Bank of Cyprus announced its U-turn after a meeting with the head of the Ruling Democratic Rally Party (DISY), Averof Neofytou who had launched the campaign with posts criticising the bank charges on social media.

In an announcement BoC’s CEO Panicos Nicolaou defended the initial decision to increase charges as part of their digitisation roadmap, however, as he claimed, “it has been proven that Cypriot society is not yet ready for such a big change”.

Arguing the charges that were to be introduced did not make the bank the most expensive in Cyprus, added that their main aim was to encourage clients to digitalise their transactions, especially using their mobile phones.

“Already, 75% of our transactions are done through digital channels, and our largest branch today is the customer’s mobile phone.”

Nicolaou also said the new charges reflect the cost of transactions, adding that BoC intends to absorb a significant portion of the cost.

He noted that reports regarding the digital readiness of Cyprus, show that “we are not competitive” when it comes to new technologies which are to play an important role for growth and employment in the years to come.

“Big organisations need to push the economy and society to step up digitisation of the country. But we do recognise that some of our fellow citizens are still unable to switch to digital services.”

Neofytou did not hide his “absolute satisfaction” with the suspension of new bank charges and said with prudence solutions can always be found.

The DISY leader’s social media comments about the charges prompted his fellow MPs to join the crusade to stop the “punitive hikes”.

Neofytou took on the banks by publishing a range of increased charges that BoC was ready to impose on their customers. He said such hikes targeted the most vulnerable members of society, especially the elderly who do not bank online.

Under the new regime, issuing a chequebook would cost

EUR 40 from 25, an increase of 60%, noting that this does not affect businesses but a pensioner on EUR 400-500 a month.

The charge for paying utility bills at a bank counter would increase from 2 euros to 5.

Neofytou said that cash withdrawals with the assistance of a bank teller would go up from 2 euros to 5 while charges for managing a current account of up to EUR 3,000 will increase to 6 euros from 3.

“They do not want poor customers. They do not want to serve the poor and middle-income groups. Simple as that”.

In a letter sent to the Cyprus Banks Associations, MPs said they found the increases to be “punishing consumers” who do not have online skills.

House Finance committee chair Angelos Votsis told reporters that if banks want to promote the digitalisation of their enterprises and cut red tape costs, they should not go about it by punishing those who are not tech-savvy, but rather encourage those who have the skills to do so.

“It’s now time as the situation improves to reward their customers rather than going after them, especially as the most vulnerable and low-income retirees find it difficult to use new technology”.