1. Loans and Deposits
By virtue of Circular 21/24-10-1995 of the Governor of the Bank of Greece credit institutions operating in Greece are invited to offer adequate information to their clientele as regards the characteristics of the banking products available and in particular their profitability, cost and risks involved as well as the modalities pertaining to the operation of accounts. To this end banks must provide information as follows:
- The interest rate(s) paid on the basis of the duration and amount deposited
- The time period used as the basis for the calculation of interest payment.
- The dates of interest capitalisation and the relevant annual return.
- Any additional terms and requirements (eg. Minimum amount of initial deposit or outstanding balance).
- Commission fees and other expenses related to deposits kept in a credit institution.
- The amount of minimum or prime interest rate.
- The amount(s) of commission fees and expenses involved.
- The kind and amounts of percentages of contributions, taxes and duties.
- In case of consumer loans, the interest rate and the period used as the basis for the calculation of interest as well as any change in interest rates.
- The default interest rate and the method used for its calculation.
- The capitalisation dates.
- The terms and relevant surcharges in cases of violation of the contractually agreed loan limits by the borrowers.
- Any surcharges and the method of calculation thereof in case of premature payment of the loan.
- The risk involved as regards the entire cost of the loan in cases of loans concluded in foreign exchange or embodying a foreign exchange clause.
- The cost involved in the use of techniques for covering risks deriving from a change in foreign exchange parities and/or interest rates.
- In cases of loan agreements with fluctuating interest rate, the period of application, the method of calculation thereof and the factors likely to affect the entire cost of the loan in question.
- The consequences deriving from the method used as regards payment of interest and payment in full of the loan, so as to make clear to the client the options available.
- The risks and likely losses involved
- The rights of clients, in particular in cases of insolvency of the credit institution involved
2. Foreign Exchange Bureaus
The competence of the issuance of special licences for the establishment of foreign exchange bureaus is assigned to the Foreign Exchange Commission of the Bank of Greece.
Decision No 492/1992 of the Governor of the Bank of Greece provides that such licences are granted to companies limited by shares (Sas) that are not credit institutions in the meaning of Law 2075/1992, whose exclusive purpose is the operation of a foreign exchange bureau. The required minimum paid-in share capital is drs. 80 million and must be paid in cash.
It must be noted that the above Commission requires evidence for the existence of special technicoeconomic infrastructure detailed in a feasibility study, ie. A market survey including: a) the existing potential, b) the documentation concerning anticipated clientele, c) a description of the premises and of the mechanical equipment, d) the personnel to be employed with an expertise in banking transactions, e) an analytical description of the organisation (administrative structure, accounting plan), and, f) the number of offices to be established.
The contents of this article are intended to provide a general guide to the subject matter. Specialist advice should be sought for your specific circumstances.