New bank law on the way

The government is expected to submit to Parliament in the next few days an amendment that will allow the Bank of Greece (BoG) to monitor bank charges that consumers are hit with despite opposition to the protective measure, a source told Kathimerini yesterday. BoG Governor Nicholas Garganas said in an interview published in Sunday’s Kathimerini that the central bank had recommended that it broaden its supervisory role to help shield the country’s growing number of loan holders from excessive costs. Government sources confirmed that the ruling conservatives are in talks with the central bank as officials draw up the legislative measure that will be completed in the «coming days.» The amendment will address the terms concerning savings deposits and loans, and the level of commissions and fees applicable on different financial products, the source added. Additionally, the Bank of Greece will be in charge of transparency issues relating to bank services and the disclosure of consumer rights. With credit growth in the economy remaining robust, the government will take these steps in a bid to protect a growing number of consumers obtaining mortgages and other loans. Talks regarding preparation of the amendment have so far been held only with the Bank of Greece, leaving commercial banks out of the picture. Sources said that the Hellenic Bank Association (HBA), a non-profit organization representing all banks operating in the country, are expected to protest the legal change. The amendment will also give the Bank of Greece the right to tell banks to tone down their advertisements or even to withdraw them if they are regarded as clearly misleading. Other protective measures to be covered by the amendment are the means that banks, which in 2005 reported strong profit growth, use to determine the interest rates they charge. The protection of consumers’ rights, including bank customers, is currently handled by the Development Ministry. Garganas said that the central bank can help boost their protection with its expertise.