Central bank issues reprieve for bounced cheques.
UNTIL capital controls become more relaxed and the banking situation returns to normal, the Central Bank has decided not to blacklist anyone whose cheques may have bounced recently.
"During these difficult times, the Central Bank has informed the Central Information Archive to suspend operation," Central Bank spokesperson, Aliki Stylianou said. She added this meant that anyone whose cheque may have bounced recently would not be blacklisted.
Stylianou said the measure would remain in place until things returned to normal and was aimed at helping those who might have unwittingly had their cheques bounce. The problem with the cheques materialised with bank closures last month.
A person or a company's name will be placed on the Central Information Archive's blacklist if in the space of three months, three of their cheques bounce, irrespective of the amount, or if a cheque of over e1/42,000 bounces.
The current relaxation of measures has been labelled as dangerous by various economists who warn that there could be people taking advantage of the situation. Head of the Cyprus International Institute of Management (CIIM), Theodoros Panayiotou said it could be seen as a double-edged sword.
He said it would protect people who issued cheques before any haircut was decided but would also protect anyone who might issue a cheque in the knowledge that they do not have the funds to cover the value of it. He added that this could cause more problems as it would be difficult to ascertain who issued a bounced cheque unwittingly and who issued one knowingly.
For one businessman the banks lack of flexibility has caused his company severe operational difficulties. "I had deposited roughly 10 cheques valued at e1/415,000 although they hadn't cleared yet and I wanted to make a payment of e1/4140 but couldn't because my account had reached its limit," he said. He told the Mail he had to leave an important meeting to transfer money from a personal account to cover the e1/4140 payment. "I'm not asking the banks to break the rules, and we are probably in this mess right now because our banks have been overly flexible over the years, but all I want is for them to use common sense when it comes to certain transactions," he added. He believed it was not a legal issue but rather a moral one but fully understood that although they weren't exercising common sense, banks were doing everything by the book.
Copyright Cyprus Mail 2013
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