Greek Banks Admit To Charging Customers To Exchange Big Bills For Smaller Ones

Tyler Durden's picture

Earlier this month, a reader noticed something rather disturbing. Piraeus Bank seemed to have added a new line item in one of its reports and that new line item appeared to suggest that the bank was set to charge customers for exchanging €500 notes for smaller bills.

And it wasn’t just Piraeus. Other Greek banks looked to be doing something similar.

Now it would be bad enough if this was just another example of banks making up for lost margins by passing ZIRP and NIRP onto customers via fees or if this were simply Greek banks being forced to squeeze a little extra out of their retail business because they are still wholly insolvent. But it’s the timing of these new exchange taxes that raises eyebrows.

Remember, reports began to circulate earlier this year that the ECB was considering doing away with the €500 note. That was distressing news for many Greeks who last year, fearing the troika may one day threaten to essentially confiscate their savings (again), eschewed the bank in favor of the mattress. Obviously, much of that mattress money is denominated in €500 notes - notes which Draghi is now set to phase out.

Upon hearing the news, “many in Greece – especially older people – rushed to deposit the money in their accounts,” eKathimerini wrote last month, adding that “bank officials say depositing the 500-euro notes at a bank is the only way for people to rid themselves of them without losing the money, as it is not possible to exchange them for smaller notes.”

Or at least it wouldn’t be once they’re taken out of circulation, but in the meantime it is possible, and as it turns out, Greek banks are indeed doing precisely what we suspected they were doing: they’re charging to exchange the €500 notes for smaller denominations.

Here’s eKathemirini again:

Banks collect a commission of 1.5 percent on average when changing 500-euro bills for notes of lower denominations, citing the administrative costs of keeping their branches stocked with notes of smaller value.

 

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 amount a customer wishes to exchange.

Right. Greek banks need to offset “the administrative costs of keeping their branches stocked with notes of smaller value.” Normally that would translate roughly to this: "we need to offset the administrative costs of being a bank," but because this is Greece, the banks get to blame the ECB and Brussels: 

In response to criticism about the commission they charge, banks counter that the administrative cost of supplying their branches around the country with smaller banknotes is unusually high at present with the capital controls still in place and a 420-euro cap on the weekly amount that can be withdrawn in cash.

It's not immediately clear why that makes sense, but we're sure they'd have an answer should anyone care to ask.

As eKathimerini continues, "people started going to banks to exchange top-denomination euro bills after it was reported that the European Central Bank intends to withdraw them as a measure against money laundering." So if you are Greek and you were effectively forced to take your money out of the bank because after last summer you feared a depositor bail-in might be right around the corner, you now have the distinct pleasure of having to pay a fee to exchange your large bills for smaller ones at the very same banks where you withdrew the money in the first place. But that's all part of living in a debt colony of Germany we suppose.

The question now is how long before banks in countries that aren't Greece adopt the very same fees? And what will their excuse be? Does the ECB really intend to to allow banks to make a profit off of the gradual phasing out of physical bank notes?

There's no fee in Greece, of course, if you simply deposit the €500 notes in your account. Just like they'll be no fee when the final push to a cashless society begins and everyone is forced to turn in all their physical money in exchange for 0s and 1s on a computer screen. Or at least they'll be no initial fee. But trust us, you'll pay later when the economy starts to slow down and, without the option of resorting the physical cash, you'll be forced to choose between swiping your debit card or seeing the bank confiscate a portion of your deposits once central banks cut rates to -20%.

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Theonewhoknows's picture

The war on cash has started - now we see how this can help the US hold onto its privileges - The Reason for negative interest rates in Europe is to pay the debt to the FED after 2008 help. The same help that got Bernanke puzzled during his hearing in front of the congress. As he 'didn't remember' how much money European banks got during 2008 meltodown. Now FED is in trouble so EBC is doing everything to look like a trash to give obvious choice fro investors as to where to put their money. http://independenttrader.org/the-madness-of-the-ecb.html

hedgeless_horseman's picture

 

 

...the bank was set to charge customers for exchanging €500 notes for smaller bills.

Should have used First CityWide Bank

http://www.nbc.com/saturday-night-live/video/first-citywide-change-bank/...

Do you need options, or have special requests changing notes?

http://www.hulu.com/watch/2315

JackT's picture

The idiots set the withdraw limit at €420, they should have set it at €500 and paid out with one crisp bill thus doubly-screwings the serfs..maybe next time.

OldPhart's picture

 

Why aren't there Greek Terrorists bombing banks in Germany by this point?

perikleous's picture

They won't lash out because they(the majority) of Greek population would rather be bled dry,whored out,used,abused,treated like a red headed stepchild and told what they as a nation will be expected of them, allowed to earn,spend and do, just to remain a member of the EUROZONE/EUROPEAN UNION... They accept the price they are paying because the one thing most Greeks do not accept is CHANGE, and leaving the group and having/controlling your own money as a nation should do, would be CHANGE!!! Sadly the Greek population as a whole always did better pre EURO (DRACHMA). Had they stood there ground and walked from EUROZONE and dumped the fake Debt that has been imposed on them by fraud, they could have reinstated the Drachma and started over and as a free country (free of debt) they could have taken a legit loan from Russia/China for the pipeline(Russia)/railway/ports(China)  and succeeded by this point... When they blinked before during the fake holdout, the Troika froze the banking(its not there money/EURO) they "Greeks" paniked and rolled over instead of saying F-CK YOU we will be ok... Greece would have had one issue, medication because the EU agreement enables Greece to obtain it at set prices, all else could have been obtained elsewhere or supplied from within the country, but that would have been more CHANGE that Greeks do not like!! The majority fought going into the EURO for the same reasons (CHANGE) but that was all overlooked when they were all offered personal loans immediatly after the entry into EURO, money to finance housing/business and BS with No collateral/previous credit and that eased the pain of CHANGE!!!!!   The only threat leaving the EU is Turkey and considering recent world events it seems Russia would have had there backs.. As for the refugee crisis, EU would have waived any/all restrictions to get there help on the border issue, Irdogan(Turkey) could tell Merkel to "get on  her Knees", and she'd do it at this point, so Im sure Greece would have been ok If they had accepted CHANGE... Considering the EURO-Drachma exchange rate the tourism would have skyrocketed, they would have been free to legalize certain desired plants/ psychoactive fungus and made this a tourism goldmine overnight, but they feared that one thing as always .......      CHANGE!!!! For a country that was at one time living very poor but somehow unusually happy regardless and extremely proud people that love to gamble,  one would think they would embrace change/risk  of the unknown, but  they do not!!!

perikleous's picture

They won't lash out because they(the majority) of Greek population would rather be bled dry,whored out,used,abused,treated like a red headed stepchild and told what they as a nation will be expected of them, allowed to earn,spend and do, just to remain a member of the EUROZONE/EUROPEAN UNION... They accept the price they are paying because the one thing most Greeks do not accept is CHANGE, and leaving the group and having/controlling your own money as a nation should do, would be CHANGE!!! Sadly the Greek population as a whole always did better pre EURO (DRACHMA). Had they stood there ground and walked from EUROZONE and dumped the fake Debt that has been imposed on them by fraud, they could have reinstated the Drachma and started over and as a free country (free of debt) they could have taken a legit loan from Russia/China for the pipeline(Russia)/railway/ports(China)  and succeeded by this point... When they blinked before during the fake holdout, the Troika froze the banking(its not there money/EURO) they "Greeks" paniked and rolled over instead of saying F-CK YOU we will be ok... Greece would have had one issue, medication because the EU agreement enables Greece to obtain it at set prices, all else could have been obtained elsewhere or supplied from within the country, but that would have been more CHANGE that Greeks do not like!! The majority fought going into the EURO for the same reasons (CHANGE) but that was all overlooked when they were all offered personal loans immediatly after the entry into EURO, money to finance housing/business and BS with No collateral/previous credit and that eased the pain of CHANGE!!!!!   The only threat leaving the EU is Turkey and considering recent world events it seems Russia would have had there backs.. As for the refugee crisis, EU would have waived any/all restrictions to get there help on the border issue, Irdogan(Turkey) could tell Merkel to "get on  her Knees", and she'd do it at this point, so Im sure Greece would have been ok If they had accepted CHANGE... Considering the EURO-Drachma exchange rate the tourism would have skyrocketed, they would have been free to legalize certain desired plants/ psychoactive fungus and made this a tourism goldmine overnight, but they feared that one thing as always .......      CHANGE!!!! For a country that was at one time living very poor but somehow unusually happy regardless and extremely proud people that love to gamble,  one would think they would embrace change/risk  of the unknown, but  they do not!!!

JAFAH's picture

You can say that again!

OverTheHedge's picture

Or, you could look at it a different way: the Greek government is a marauding bunch of thieving, corrupt, psychopathic scumbags. If you let them have their own currency to play with, instant Venezuela will ensue. Tell me - would you rather have a 1.5% trim, or a 50% shave?

If you ignore the government as much as possible, it mostly doesn't bother you. If you make a fuss, nasty men in body armour will make your day uncomfortable, to put it mildly.

More interesting to me is the push to stop farming - it is getting to the point where it doesn't make sense to plant the new crop. Might see some interesting developments come summertime.

 

 

rejected's picture

They did that back in the first depression (1930's). Farmers didn't plant and they actually burned / destroyed crops trying to get prices up.

ebworthen's picture

When you can't demand Gold or Silver for your paper currency, and central banks create the paper from nothing - this is the result.

Baa baa's picture

Not by choice, even closer to the flame we are drawn.

Joebloinvestor's picture

Wait until they impose a "redemption" tax for exchanging gold for specimen.

 

City_Of_Champyinz's picture

That shit is going to hit everyting eventually.

TuPhat's picture

I asked a coin dealer if he would take a personal check for gold coins. He said no. I told him I could go to the bank and get a cashier's check but he said he wouldn't accept that either. He wanted paper money but he would take a credit card for a fee. I left with some silver for my cash but no gold. Cash is king at least for now but I expect that to change.

hairball48's picture

I have new Franklins stashed. I was thinking the other day about getting smaller bills cause that shit in Greece is coming our way sooner than y'all think.

Still stackin'

hairball

blue51's picture

I had the same thoughts about the C-notes. I switched a few grand to 50's , but haven't switched the rest to 20's yet. A lot of small business's around me, will not accept the 100$ .   

 

RichardParker's picture

Some places won't accept 50's for small purchases either.

bluskyes's picture

If they refuse to accept payment when presented with any denomination FRN, no further payment is required.

Joe A's picture

Is it even legal to charge for a fee for converting big notes into small notes? And even if the ECB takes the 500€ out of circulation, they's still be obligated to accept it. It is legal tender.

East Indian's picture

There is a vicious side effect for this measure: if you give a 500 euro note to a shop, he knows that he will lose some money when he deposits it in his account; so he will refuse to accept it. Thus that denomination becomes unwanted. Everyone wll rush to get rid otf it. Thrown out of circulation quickly. Repeat the pattern till all physical cash is eliminated. voila!

Joe A's picture

Shops perhaps but banks can't. You can even present them a ripped up note. As long as the serial numbers are readible then (national) banks need to accept it.

ThirdWorldDude's picture

"As long as the serial numbers are readible then (national) banks need to accept it."

Yes, for a fee. TBTF uber alles!

12cmKAPJ's picture

Oh my. Welcome to Sweden, anytime. Our banks do not accept cash. They dont hold cash in the register. All cash transactions are made by deposit and withdrawal machines.

HenryHall's picture

So Swedish deposit machines accept coins as well as banknotes?

 

Silver is the money of the people. Buy silver while you still can.

12cmKAPJ's picture

No, coins you have to spend or convert to bills in a store somewhere if you are lucky. Large quantities of coins are hard to get rid of though. There are machines usually in supermarkets that can convert coins to bills - for a fee of course (1,5%).

swmnguy's picture

I wouldn't want to be sitting on a large quantity of anything bigger than $20's.

OldPhart's picture

Try holding onto $20k in $20's.  I'd have a hundred nut cans in the pantry (counting, oh, shit, I do), but the money was lost on my world safari on the dry lake fifteen miles from here.  The shit just jumped right out of the boat and sank to the bottom.  Been heart-broken ever since.  Somehow my registered .45, .30 carbine and .223 vanished at the same time.  Woe is me.

Meanwhle I continue to stock various other calibers...um, for trading purposes.

Mr Drysdale's picture

I am glad to hear that, at least, you are alive and well!

I damn near drowned last year while water skiing. The AR, Pistols, and another long gun, lost at the bottom!('Bitter clinger' trying to compensate and all)

I tried to save them, but the PFD could not hold all of us up.

Sad day

babkjl's picture

Can't resist: Bitcoin users not affected!

MsCreant's picture

Not by this, no...

You are silly to think that makes you safe.

I want to help, I really do. 

Wait for it...

 

 

NONE OF US ARE SAFE WITH ANYTHING WE ARE TRYING TO DO WITH OUR SAVINGS.

JustUsChickensHere's picture

On a long enough timeline .......... well of course nothing is safe. BUT diversification and watching for trends like a hawk can improve your odds.

You can expect to take a hit now and then, but with care you should not lose at a rate higher than you can saveat . So you can still have net increasing savings.

 

MsCreant's picture

I agree and not. Yes watch like a hawk.

On a long enough time line inflation will have its way with your savings. And like OldPhart below says, all forms of confiscation.

OldPhart's picture

MsCreant actually nails it.

Since the fruad of 2008 I stopped all contribution to my 401-k.  Pulling any money out of it is effectively impossible as of 2010.  So I've rolled it all into the guaranteed pool that pays 4% per year.

Since 2008 my 401-k hasn't lost a dime except for when we moved funds from one administrator to another...we were locked out for a month, in October of 2014.  I lost $6k in one month (on about $60k)  Since my money is in the total control of the fund, and I have no means of making any sort of withdrawal, I've resigned my 401-k to it's certain fate.  Confiscation.

Also, in my brief awakening in the 80's, and realization that Congress could give a shit about my retirement via social security, I know that I can never retire.  I will die at my desk (figuratively, I have a mental image of my corpse on the side of a quiet, desert road, nicely dried and mummified so I don't smell as bad as I do now)  In my younger life I saw that I had kids following me, my wife and some lady.  Now I recognize them as my grandsons.  [This is a vivid, recurring image, since the 80's])

Anything we attempt to do with 'savings' will be countered by confiscation.

The only thing that CAN be done is to withdraw from the system, pull your cash out of the banks and start to think.

Personally, I've taken every dollar I can out and split between cash and silver.  I've got about $1k of 100's, and another $3k of $20's scattered about.  There's 75 pounds of Mint Proof Sivler Eagles mixed in and, at present, 1/2 ounce of gold.  I've goty $20k in cash headed my way and I'm praying that gold takes an absolute shit on price.  Because that's my next purchase.  Well, after I get anoher fifty pounds of meat.  My canned stock was rejuvinated tonight with a $425 injection.  As an old fuck, comfort foods reigned supreme.  Got a shitload of collard, mustards, turnips and spinach greens.  A boatload of red beans and rice, and some canned tamales.  Plus some other stuff.  Budget tomorrow is for $300 to the Dolar General for some other canned shit.  And I've got $600 to the local meat guy for a roughly a hundred pounds of various stuff.  (I buy seldom, but when I do, it's in bulk.)

Remove your savings, put it to immediate use.  Start stocking up on shit you prefer to eat.  Even some exotic shit that gives a change in the day to day.  I'm no super prepper, I've only got nineteen shelves that stretch for 24 feet to fill, and Im only on the first seven shelves.

The only money that should be in your bank is the immediate cash necessary to pay your utilities and debt.  All else should be withdrawn and redepoisted in the Bank of Serta.  My grandparents told me this, years ago, and I didn't listen.  But I'm listening now.

Latitude25's picture

Save-a-Lot for the best price on canned food.

css1971's picture

Get one of those big canning pots, some glass jars and make your own preserved/canned stuff from fresh. Lasts for years if kept out of light and you know exactly what's in it. Nother benefit is if you have a garden, the produce can be made to last basically forever. Better than freezing, no electricity required once it's done.

I have some Italian colleagues who do this every year. They get together, go to a bunch of farmer's markets, buy up all the best tomatos and turn them into tomato sauce. They're not prepping or trying to save money, it's just the only way to get decent sauces apparently.

GreatUncle's picture

Spot on this point...

The only money that should be in your bank is the immediate cash necessary to pay your utilities and debt.

**They cannot confiscate what they do not hold** after that do with it what you want / can.

If you can get your employer to pay you in cash instead of into a bank account that is good too, it is yours then.

 

My mind now works on you turn that money into some hard asset, even a rock is an ssset if you hold it. So spread across as many different type of hard assets as possible maximining the ability to future trade havign something somebody wants.

Mr.Danglemeat's picture

nice blurb about food... shit, now I'm hungry.

rejected's picture

Our Grandparents didn't have to worry about Mr Digital, the cloud, and a whole population of iThingy crazed morons.

Savvy's picture

Banks... I heard of a fellow who wanted to teach his teenager the value of saving money. He opened a savings account for the teen with a $500 deposit. No w/d and no adding to, after a year the account held $370.

ombudsmanrules's picture

In Australia... keep it there for another two years and the government will just seize the lot because it's 'inactive'  Same goes if you put $50k or any amount in there and leave it.

East Indian's picture

well, they dont do the funeral free, do they? then how can they let go of a chance like this to fleece you ?

Fiat Envy's picture

The Greeks are gonna keep getting it Greek style until the grow some balls and vote Golden Dawn.

medium giraffe's picture

Bullshit.  Greeks don't have any money left.

KJWqonfo7's picture

It doesn't take money for a revolution.

It take balls, commitment and sacrifice. Something the Greeks used to have.

Yen Cross's picture

  I haven't had time to check yet. [ too busy buying metal, and getting ready to short the ¥]

   The fucking TROIKA has been renamed so many times... Have the Greek withdrawal limits been lifted yet?

perikleous's picture

They rename it to make the group acceptable, once they get a bad name yet still need to be "worked with" we rebrand, like AL QAEDA, they were given a bad name(9/11) so when NATO/CIA needed to "work" w/ them they rebranded them "FSA"moderate rebels/Taliban/AL NUSRA/ISIS = DAESH  or to the rest of the world, middle eastern mercenaries (for hire)that work for $$$$ USD and like all employees, they will walk off the job as soon as there boss stops paying them (NATO/EU/US/S.A./ISRAEL)