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Greece’s banks keep files of 500-euro notes swappers, charge 1.5% commission

On top of charging commission when someone wants to exchange 500-euro banknotes with smaller ones, Greece’s banks are being ordered to note the personal data and transaction history of clients who exchange 500-euro banknotes, along with cross-checking the details recorded with other transactions by those customers, according to a circular issued by the Bank of Greece.

“The aim of the measure  is to prevent money laundering, which experts believe to be behind demands by certain bank clients to exchange bills of high denomination.”

Money laundering or just a service for the tax office?

After a statement by the governor of the European Central Bank, Mario Draghi, regarding a possible withdrawal of 500-euro bills, many Greeks rushed to have their banknotes swapped with 20- and 50-euro bills, as some 20 billion euros in cash is believed to be kept in Greeks’ homes. This amounts to a vital amount for the Greek economy, especially if some of it is the product of illegal activities.

Of course, the reason for Greeks to be in position of several 500-euro banknotes is that thousands of depositors withdrew large amounts of money from the banks during 2012-summer 2015 due to economic and political instability and the threats of Grexit. Capital controls imposed on 29 June 2015 put an end to the massive withdrawing. Weekly limit of withdrawing is still 420 euro. therefore, no more 500-euro notes…

Commission for exchanging 500-euro banknotes

In addition, banks started to charge a commission of 1.5% when changing 500-euro bills for notes of lower denominations.

When exchanging one 500-euro note for smaller bills, the charge is 3-5 euros (depending on the bank) , while the maximum charge comes to 200-250 euros regardless of the total amount in 500-euro notes the customer wishes to exchange.

No commission is charged if a customer wishes to deposit 500-euro bills into an account.

The banks claim the charge is to cover administrative costs of keeping their branches stocked with notes of smaller value.

PS I assume, banks will have to rent additional warehouses to keep the many, many small banknotes near the branches… *sigh* I have no idea, whether some lawyer has been investigating the legal framework of this charge.

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  1. 20 billion euros amounts to money lost to Troika in the case of a (sure to come) bail-in.

  2. Giaourti Giaourtaki

    Regarding the warehouse sounds funny, for the world’s biggest reinsurance company Munich Re it gets serious as they spread the rumour of building a big bank-safe for cash and gold, because of the zero interest rates, some German banks who don’t like to pay the ECB are said to have similar plans.