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BOCY UK ‘risky’ accounts closure blunder ends

06 December, 2013

The gaffe by the island’s unpopular centralbanker about the alleged ‘risky’ accounts at the Bank of Cyprus UK came to end after a week-long uproar that saw an opposition MP duped into the argument, suggesting the account holders could have been money launderers, claims that were rejected by the bank.


Central Bank Governor Panicos Demetriades made the allegation during a House Ways and Means committee session, saying that British regulators had shut down 100 accounts in the Bank of Cyprus UK subsidiary that were considered as high risk accounts.
Communist Akel MP Irene Charalambidou took the baton and raced further, claiming the accounts were in fact 130 in total and that they had been closed as part of the EU’s anti-money laundering directive.
Seeing as the centralbanker could not provide any information on the list of names who held the accounts, Charalambidou argued that the Bank of Cyprus ought to be forced to provide the names to determine if these were opened around the time of the Eurogroup decision in March, after which strict capital controls were introduced, and whether they had privileged information.
The MP, who has launched other crusades in the past, that have since fizzled down, later changed her tune calling on these account holders to come forward and justify their banking activities, especially if these could be proven to be legitimate.
The pro-administration Alithia daily criticised both Demetriades and the Akel MP, saying the “baseless statements caused an unnecessary public uproar in parliament and political parties.”
Even fellow Akel MP Stavros Evagorou tried to tone down the brouhaha, saying that all facts should be properly investigated before going any further with these claims.
The newspaper added that the accounts held by politically exposed persons (PEPs) were never closed, nor could they unilaterally be shut down by the bank, concluding that what possibly happened was the common practice of winding down inactive accounts.
Committee chairman Demetris Syllouris said earlier in the week that that parliament has asked for more data on the accounts, adding that “if there is any information that we must discuss publicly we will do so”.
He added that the all-party committee will have a meeting next Tuesday with Attorney General Costas Clerides to discuss the matter further.
The Bank of Cyprus issued an announcement on Thursday saying that a regular review of all accounts showed that there was “a number of accounts of Cypriot and foreign citizens that needed to be updated. These include accounts that remained inactive for a very long time or the balance was very small.”
The bank said that “one of the options considered is their closure. In such cases, the account holders have been informed” and that “none of the said accounts had been closed under suspicion of money laundering.”
“Banking is a matter of reliability and any public discussion using baseless information undermines the efforts in Cyprus and abroad to revive the trust in the Cypriot banking system,” Bank of Cyprus said in the announcement.
The Central Bank Governor has remained silent.