Banking, Cyprus Style

On the list of errands this week was a trip to the bank. They called – on one of our cell phones, while we were at the beach (really!) – to tell us that our new Euro cheque books had arrived and could we please stop by to pick them up. On 1 January 2008 Cyprus has chosen to switch currency from the Cyprus pound (CYP) to the Euro (€, EUR) as is their right as a European Union (EU) member.

The trip into the bank was a reminder of how frustrating bureaucracy can be, how different things sometimes are, and how we still get tripped up occasionally despite our best efforts. It was also a timely reminder of how cheap it is to bank in the UK, although it’s likely that we didn’t appreciate that while we were still living there.

In England as long as we didn’t spend more money than we had in the bank or go beyond an agreed overdraft limit then banking was absolutely free. No charges for cheque books or statement or online access and, in most cases, a small amount of interest was paid on credit balances.

In England it looks like that might change as banks reconsider their position, partly as a result of the legal action to reclaim penalty bank charges. Last year the top six High Street banks in the UK made an estimated £4.5bn from penalty charges. These are charges that are incurred for unauthorized overdrafts, bounced cheques and clearing Direct Debits when there are insufficient funds in the account. Consumers are now going to court to claim back these fees on the grounds that they are ‘unfair’ in the legal context and therefore can not be charged.

Whilst they might be successful in reclaiming these charges there’s a real chance that banks may change their business model as a result and that may well result in the end to free banking as enjoyed by many at the moment.

Anyway, having picked up our two new cheque books (one for each account) we can expect to see a charge of around £6CYP (£7.20GBP, $14.50) on our next bank statement. The statements themselves will cost us £2CYP (£2.40GBP, $4.80) and the direct payment of our rent will be another £3CYP (£3.60GBP, $7.20).

In addition the bank keeps 10% of all of the interest they pay to us. That gets sent to the government to pay for defending the island. Since you ask, yes we were a little surprised to see that on the bank statements too.

Only now do we appreciate quite how cheap it was to bank in England.

So, having picked up the cheque books we then broached the slightly difficult matter of the debit cards. When we opened the accounts we were given debit cards but they were only good for one year. A month before the anniversary new cards arrived, with a three year expiry. Obviously we had proved ourselves worthy of the trust of the bank. Actually that’s not too hard here, bouncing a cheque is a criminal offence and, as well as a conviction, will result in the individual being added to a black-list which is shared with all banks on the island.

Sadly, the new debit cards failed to work. When we tried them in an ATM they were rejected, and eventually kept by the machine. Each time the card was kept we went into the branch and explained the problem. The member of staff then opened the ATM, removed the card and returned it to us there and then. In England, and probably in many other parts of the world, the staff would have to wait until the bank was closed before opening the ATM. At the very, very least they would have to wait for the branch to be empty of customers.

Here such safety-measures are laughed at. Tony M, we often think of you when we go to the bank ;-)

After several rounds of having Ian’s cards retained by the machine we headed back to the bank. It turned out that the cards had been cancelled because the wrong PIN had been used too many times. But, said we, it’s not the wrong PIN. After much frowning and tapping away on the computer the bank clerk looked even more baffled. Eventually she asked

“You didn’t change the PIN when it was first issued, did you?”

This was asked in a tone of voice which implied that such behaviour would be truly strange. Of course this is exactly what we had done, what we always do, what everyone does, surely? When we confirmed that we’d changed the number from the bank’s randomly-assigned 7813 to something more memorable she then asked

“And you have been trying to use the new PIN? Aha, then I see the problem! That is the wrong PIN. You must use the PIN that the bank issued, not the one you have chosen!”

All of this was said in such a way as to confirm, if it were needed, that everyone knew this and that we were obviously mad. Surely it makes sense for the bank to reset the PIN to their original choice when they issue new cards, overwriting any changes we had subsequently made. Really, the mind boggles.

Now we know to keep a note of the original PIN so that in three years time, when these cards expire and are replaced, we will know what PIN to use access the account to change the PIN back to one we can remember.

But none of this can happen until we can use these cards again which won’t happen until the bank is issues a PIN reminder, which they are happy to do for the princely sum of £10CYP (£12GBP, $24)!

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