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21 May, 2024
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Potential bank tax discussed amidst rate dissatisfaction

Finance Ministry contemplates additional levy as banks' lending practices scrutinized

Panayiotis Rougalas

Panayiotis Rougalas

Leaving the door open for potential action, the Finance Ministry is considering an additional tax on banks due to dissatisfaction with their current approach to deposit and lending rates.

The subject of an extra tax on banks was brought up in the Commerce Committee, where Finance Minister Makis Keravnos expressed discontent with the interest rate policies they've implemented thus far.

As per the Minister's remarks, a 0.5% tax on deposits is already in effect, but the Ministry of Finance is carefully reviewing all aspects and will reach final conclusions on this matter. The decision, he added, will hinge on the bank's handling of the entire situation.

Mr. Keravnos emphasized that steps need to be taken to alleviate some of the costs borne by borrowers. In this light, the Ministry of Finance is calling on banking institutions to embrace their corporate social responsibility.

During the Commerce meeting, the necessity of protective measures for consumers in response to recent increases was noted. Additionally, discussions revolved around the potential for further lending rate hikes linked to non-performing loans (NPLs) and the challenges borrowers might face in managing heightened repayments.

[This article was translated from its Greek original]

Cyprus  |  banks  |  tax

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