Residents from villages in Limassol’s wine-growing region have taken to the streets to protest Hellenic Bank’s decision to shut down a branch in the village of Pachna, the last remaining in the area.
A string of 20 villages, known as the ‘Wine Villages’ in the west of Limassol has been left without a single bank to serve them, at a time when “the villages were seeing the local economy grow and attracting young couples”.
Co-op branches served local communities, but last year’s Hellenic buyout has seen them disappear with rural villages feeling isolated, ignored and left to die.
Hellenic is operating a bank on wheels scheme to serve areas where branches have closed, however, the Wine Villages are not included in the bus routes.
Talking to the Financial Mirror Pachna community leader Andreas Savva said a committee representing the communities have been campaigning for political parties to reverse the bank’s decision for several months now.
“We even had meetings with the CEO of Hellenic Bank a couple of weeks ago who had promised that the Bank would rethink its decision to close the branch. However, here we are. Twenty communities left without a single bank branch for residents to carry out their business,” said Savva.
Hundreds of residents were told they will be able to conduct their banking business at the nearest Hellenic Bank branch – this is in Episkopi, some 30 km away from the village of Pachna.
This will make life difficult for the village elderly as they are neither savvy with technological advancements in payments nor are they be in a position to make the trip to faraway bank branches.
“Even those who are tech-savvy may have difficulties as internet coverage in the area is not up to speed,” said Savva.
Savva noted that the trip to Episkopi is not easy for anyone without a car, let alone elderly people who in some cases have trouble getting to the village coffee shop.
He said that buses make the round trip through the villages and to Limassol 4 times a day.
“We have 90-year-old people who are asking how they are going to pay their electricity bills, worrying that they might be cut off in mid-summer”.
Savva noted that the elderly from the surrounding villages come to Pachna for their medical check-ups at the recently revamped Medical Centre and would take care of their bills at the local bank branch.
He said they consider the closure of the last remaining bank branch in the region as a blow to their efforts to rebuild the communities by attracting young couples and increasing their attractiveness as a tourist destination.
“Now there will not even be an ATM to service people, shops and tourist who may need cash to pay for a bottle of water from a local kiosk.”
“At a time when new life is being breathed into the area we are left without the basics to conduct business, 38 plots of land have been sold to young couples planning to call the village their home, small businesses are setting up shop in the area.”
Savva said the community council has contacted other banking institutions who appeared not to be interested in opening a branch in the villages.
Pachna’s community leader also noted that according to laws governing local authorities they are obliged to deposit any proceeds within 24 hours.
“That means that the secretary of the community council will have to make the trip down to Episkopi daily spending 3-4 hours just to make a deposit.”
He voiced the villagers’ frustration with the government and Hellenic Bank officials, saying that they had a responsibility to the communities in question which they did not care about.
“We understand the argument that a private business entity has to make decisions that they feel are in their best interest, however, losses were not that big. Where is the company’s social responsibility?”
Savva added that the council had tabled a proposal which would see Hellenic cut their losses down to zero.
“The community board has proposed that the state building (ex-Co-op property) housing the branch be transferred to the community, which will, in turn, rent it out to Hellenic for a symbolic amount.”
Take the bus
In comments to the Financial Mirror, independent MP Anna Theologou said that the state should have taken measures to prevent rural communities being left without basic infrastructure such as bank branches.
“At a time when these areas are fighting to stay alive, the state should be taking measures to encourage people to return to the villages, rather than promoting urbanization,” said Theologou.
She argued that the government should have ensured that clauses preventing rural areas being left without access to a bank branch, were included in the deal between the state-owned Co-op and Hellenic.
She said the matter had been discussed at Parliament when the bill concerning state guarantees to Hellenic were brought before legislators, however, MPs were not able to interfere with the drawing up of the actual agreement.
Theologou argued that a way out for rural communities ignored by the bank might be to set up new co-operative banking institutions but with a new legal framework which will not allow mistakes of the past to be repeated.
“But that would be going back a few decades, while we should be moving forward.”
In a statement to the Financial Mirror, Hellenic said: “Hellenic Bank is closing a number of its branches, including the one in Pachna, clearly as part of efforts to rationalize its branch network throughout Cyprus”.
The bank said it aims to have a broad presence across the island to “meet customer needs seamlessly while maintaining the bank’s competitiveness and viability”.
“Pachna residents will be able to be served by Hellenic Bank branches in nearby villages, such as Episkopi.”
Meanwhile, Hellenic said the bank will be revising the routes of their two mobile banking units in a search to find ways to cater to local residents, especially the elderly.
A total of 486 bank branches have closed in Cyprus over the past six years following the demise of two of its largest lenders, Laiki Bank and the Co-op in 2013 and 2018 respectively.
As a result, bank customers have seen service points drastically reduced by more than half.
Before the economy crashed, in 2012, a year before the closure of Laiki Bank during the bailout, bank branches numbered a huge 850.
With the 2013 bailout and demise of the second largest bank Laiki and its absorption by Bank of Cyprus, the number of branches in Cyprus was reduced to 682.
The next wave of shrinkages came in 2016 with the number of branches falling by 140 to 544 and in 2017 that number shrank to 460.
Last year the demise of the Co-op and its good assists portfolio acquired by Hellenic Bank, the number of customer branches islandwide fell to 386.
