Parliament is set to vote on two bank account bills this afternoon that the government, the Central Bank, and the Banks Association all oppose.
The bills were submitted by AKEL three years ago. Unconstitutional provisions were identified during Commerce Committee deliberations, and the proposals were revised several times to comply with the Constitution and EU directives before reaching today’s plenary.
The controversial first bill: very small businesses
The first bill extends to very small businesses the right to open a basic payment account — a low-fee account covering everyday transactions such as deposits, cash withdrawals, bill payments, and money transfers, with a debit card and no advance notice required for withdrawals.
It also introduces rules on fee transparency, comparability, and account switching for very small businesses. Sponsors argued the legislation is necessary to give very small businesses access to low-cost basic banking services.
The Finance Ministry argued that the EU directive on which the bill is based was designed specifically to bring socially vulnerable, unbanked individuals into the financial system — not to serve businesses, however small.
The Law Office also found the bill unconstitutional and in breach of EU law. The Central Bank acknowledged the proposal would benefit very small businesses but warned it would hit bank revenues.
The second bill: multiple accounts for consumers
The second bill allows consumers to hold basic payment accounts at more than one bank. The Finance Ministry did not object to this proposal.
Under the relevant EU directive, member states may allow banks to reject applications from consumers who already hold such an account elsewhere in their territory — a discretion Cyprus could choose not to exercise.
The Central Bank and the banks have nonetheless expressed reservations.