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Bank charges on overdrafts

20/08/2004 15:35
Current account holders must think twice before they exceed their overdraft limit. The commercial banks decided to adopt the Central Bank strict directives that aim at reducing the bad debts and improving the capital adequacy and are now informing their customers on their new charges.

According to StockWatch sources, the charge varies from bank to bank and depends on whether the customer is a legal or natural person. The penalty has the form of additional interest rate, which charges the debt until the overdraft ‘returns’ to the permissible limit.

The additional charge for those cases amounts to 3%. In the case of the Bank of Cyprus, the additional charge fluctuates between 2.5% (legal persons) and 3% (natural persons). The additional charge of the Hellenic Bank is 3% for all and the Popular Bank 5%.

Taking into account the difference in the debit interest rate among the banks, the total charge varies.

The Bank of Cyprus customers, for example, are burdened with an additional penalty in case they exceed their overdraft limit. For every transaction of £20, the account is charged with £6. If on the 15th of each month the customer has not complied with the rules, the Bank charges £6 to the sums that have resulted as penalties for each overdraft of £20.