European banks lose credit transfer battle

European banks lose credit transfer battle

European Union ministers have reached political agreement on proposals which will force banks to reduce charges for cross-border credit transfers to the same levels as national transactions.

The agreement was reached despite resistance from six EU member states. It represents a significant defeat for the banking lobby, which fiercely opposes the proposed ruling.

Under the agreement, European Union banks will have to cut fees for cross-border credit transfers by July 2003, six months later than the original Commission deadline. The amended Position will be forwarded to the European Parliament for a second reading.

Internal market commissioner Frits Bolkestein comments: "This regulation will help consumers and small businesses to take full advantage of the internal market and the euro without having to pay through the nose for cross-border transactions."

The proposed regulations will apply to transfers up to €12,500, and come into force for cash machine withdrawals and card payments in July 2002. Fees for bank account transfers will be brought into line by July 2003.

The rules will be extended to cash machine withdrawals, use of bank cards and credit transfers up to €50,000 from 1 January 2006.

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