A pernicious relationship

In order to shake off their bad name as profiteering institutions, modern banks have changed their self-description into «crediting institutions» in an attempt to come across as scientific and welfare organizations. The end of savings that was heralded in Kathimerini’s editorial yesterday will most likely signal the abolition of the banks’ remaining welfarist pretensions. The zero-interest rate announced by the National Bank of Greece for balances of up to 1,000 euros (340,750 drachmas) should be contrasted to the 16 percent interest rate that these self-styled «institutions» charge on our credit cards. To put it simply, the bank borrows our 1,000 euros for free but when it lends us an equal sum it receives 160 euros (54,500 drachmas) per annum. It is striking that there are thousands of depositors who are, at the same time, using credit cards or getting small consumer loans paying a 9.5 percent interest rate to the very banks who are exploiting their savings without yielding any return. Is this a situation based on a lack of public information, a deliberate attempt to terminate savings, or a disguised fraud? All three explanations could be valid. For it makes one wonder that consumer protection institutes, the citizen’s advocate, and market monitoring bodies have not dealt with the pernicious relationship between Greek banks and small depositors and borrowers. If all of us small depositors decided to withdraw our zero-rate deposits, cancel our painful credit cards and pay off our consumer loans, banks would soon change their policy. The unwelcome and persistent female voices offering us cheaper loans on the other end of the line, would soon beg for high-return deposits.