Regulator has already responded to the banks' request. Carlos Costa said that financial institutions cannot charge commissions on deposits from multinationals or public companies.
Bank of Portugal has already responded to the request from banks and the Portuguese Banking Association (APB) on the charging of fees on deposits from large institutional customers. And the supervisor’s response was a “no”. They may not charge fees on deposits either from large multinational companies or from public companies. They are only allowed to charge other banks, insurance companies or pension funds, as they are already doing.
In recent weeks, the banks have gone to the supervisor to see if they could apply fees to institutional clients. That would be a way of circumventing the fact that they cannot charge negative rates on deposits – something that is prohibited by law – thereby mitigating the effects of the European Central Bank’s (ECB’s) negative interest rate policy.
The Bank of Portugal’s response has already gone to the banks, just as ECO News advanced last week. Basically, the supervisor insists on the regulatory theory of a 2014 circular letter on commissioning practices where it says that banks should exempt customers from paying fees on deposits according to the average balance. To ECO News, without giving a direct answer, ends up rejecting the banks’ request by referring that it will leave only the door open to the commissions’ collection from financial institutions.
“Bank of Portugal reaffirmed its understanding that Circular Letter no. 24/2014/DSC does not apply to accounts held by institutional customers of a financial nature,” the central bank led by Carlos Costa told ECO News. “Credit institutions may vary the amount of the commission for maintenance of accounts held by institutional customers of a financial nature according to their average balances,” not to other customers, notes the supervisor.
This means that the banks are only allowed by the supervisor to charge fees for deposits from other banks, pension funds or insurance companies, which they are already doing.