Monday, February 4, 2008

A story from Cyprus

Co-op banks to be included on dud cheque blacklist plan

By Athena Karsera

CO-OPERATIVE bank chiefs were yesterday divided in their opinion of a House Finance Committee decision to back a bill that would put cheque-bouncing co- op customers on a blacklist.

Plans for such a list had so far been restricted to commercial bank customers.

The Committee’s decision came during a closed meeting on Monday.

Now that they have been drawn up and agreed by the Committee, both proposals are due to go before the House Plenum shortly.

Co-operative Credit Societies chairman and manager of the New Aglandja Co- op Credit Society Dinos Constantinou yesterday told the Cyprus Mail that the Committee's decision was a positive one.

"Uncovered cheques are a big problem. The Co-operative banks should not be any different from the other financial institutions, there should be the same approach."

He said once the law had been approved, the co-op banks would have to put people systematically issuing bad cheques onto a list. "What happens now is that they leave from one branch and go to another."

Constantinou said that the list would help give a clearer picture of the number and frequency of bounced cheques in Cyprus.

The head of the current accounts department at the Co-operative Central Bank, however, had a different view.

Michalis Iracleous told the Cyprus Mail he did not believe the move would make any difference: "I don't see it working, whatever we put before a Cypriot, he is still a Cypriot."

Iracleous said the move would only prevent prospective cheque-bouncers from opening new accounts at co-operative banks: "The ones that already have accounts will continue like before."

He said it was up to each branch to decide whether to refer to the blacklist or not: "If they do decide to, then there will be progress."

"The only way is for there to be a jail sentence like in Greece. If people knew they would be tried and possibly jailed, they would think twice about writing a bad cheque. We're Cypriots, the authorities have to show us their teeth."

According to the proposal, a bounced cheque will be one that remains uncovered for seven days after it has been written.

Sources said the blacklist would also include liquidated companies, people that have declared bankruptcy and those found guilty of offences similar to bouncing cheques.

The sources said the blacklist would not be open for public access.

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