In­cen­tives for re­turn of de­posits

BoG to pro­pose lift­ing of restric­tions on cash en­ter­ing bank ac­counts from safe de­posit boxes, mat­tresses

Kathimerini English - - Front Page - BY EVGENIA TZORTZI

The Fi­nance Min­istry and the Bank of Greece look set to exempt from cap­i­tal con­trols any money that Greeks de­posit in lo­cal banks that had pre­vi­ously been in safe de­posit boxes at banks or under ma­tresses at home. The aim is to at­tract cash kept in safe de­posit boxes, es­ti­mated at over 30 bil­lion euros.

The cap­i­tal con­trol-eas­ing meas- ures to be de­cided on in the next few days are also likely to in­clude the full lib­er­al­iza­tion of the early pay­off of loans. On the other hand, the weekly cash with­drawal limit will likely re­main at 420 euros, with the only pos­si­ble change being the in­tro­duc­tion of a 14-day limit for with­draw­ing up to 840 euros from the first week.

Cen­tral banker Yan­nis Stournaras re­vealed the Bank of Greece’s in­ten­tion to qual­ify the cash in safe de­posit boxes and mat­tresses as “new money” in an in­ter­view with leftist news­pa­per Avgi on Sun­day. Sources say this re­quest is al­ready on its way to the Euro­pean Cen­tral Bank, whose ap­proval is nec­es­sary for any change, no mat­ter how small, to the cap­i­tal con­trols.

“What ap­plies to money from abroad will ap­ply to the money that is being kept under mat­tresses," he said, “so any­one will be able to put it in and take it out of their ac­count as they wish, with­out go­ing under any cap­i­tal con­trol.” Sources add that the time is ripe for this move and is it ex­pected to be im­me­di­ately ap­proved, of­fer­ing bank clients the op­por­tu­nity to de­posit as much cash as they want into their ex­ist­ing ac­counts (as with money com­ing from abroad) with­out the money un­der­go­ing any con­trol.

This move is seen as es­sen­tial 1.1138 to restor­ing in­flows into the credit sys­tem, which in May saw an­other re­duc­tion in its bal­ance: House­hold de­posits shrank by 760.1 mil­lion euros from April, to amount to 101.4 bil­lion euros. In the last 12 months (since the cap­i­tal con­trols were im­posed) the drop in house­hold de­posits has reached 2.7 bil­lion euros. And that is be­fore income tax pay­ments have even started, which is ex­pected by end-July.

Newspapers in English

Newspapers from Greece

© PressReader. All rights reserved.