Authorities question legality of bank fees

The Competition Commission (CC) is currently scrutinizing the deposit interest paid by banks to customers, looking especially into secret agreements between banks concerning the amount of interest. The CC’s General Division is expected to issue its final views on the issue by the end of the year. In addition, on November 29, the CC plenary will open its examination of certain recommendations made by its General Division, following investigations into bank charges paid by customers for using interbank systems. According to reports, the relevant recommendations specify that the size of the charges was set by the executive committee of the Hellenic Bank Association, on the basis of agreements between banks, not on cost studies. More specifically, an inspection of the electronic interbank payment system (DIASDEBIT), a system which allows customers to pay bills and other obligations, revealed that the fee per transaction amounted to -0.50. However, a special cost study carried out in the framework of the Single Euro Payments Area aimed at setting a single interbank charge, estimated that the fee should be -0.10. That is, banks have been charging their customers five times more than they should have been. Another investigation focused on the interbank system DIASATM, which allows customers of a total of 27 banks to carry out transactions. The fees charged by banks for each such transaction may be up to 3 euros. The CC also examined the DIASTRANSFER system, for transfers of sums of up to -150,000. The fees charged by banks for such transfers may be up to -100, despite a regulation issued by the European Union providing for the compulsory equalization of eurozone transfer fees to the levels of fees charged for national transfers. Greek banks are among the few that were found to have increased their minimum fees. A report by the CC said banking is one of the three sectors on which it is planning to focus its interest in coming months. High spreads In the meantime, criticism is mounting from consumer groups over interest rate spreads (difference between deposit and borrowing interest rates), as well as the fees charged for a series of services. Recently, an Athens first instance court ruled that 14 banking provisions were abusive, including the fees ranging from -3 to -20 charged for withdrawals of cash. Concern over the higher spread between the deposit and borrowing interest rates of Greek banks, compared to their European counterparts, was expressed in a recent monetary report of the Bank of Greece. According to data contained in the report, interest rate spreads at the end of last June stood at 4.19 percent compared to the eurozone’s 3.05 percent. Data from major banks show that savings interest spreads range from 2 percent to 3 percent, which serve to confirm the high levels of bank profitability deriving from savings accounts.