The MFSA has issued a circular addressed to credit institutions licensed in terms of the Banking Act, 1994, whereby, following consultation with the Central Bank of Malta, it expressly prohibits the imposition of negative interest rates on Euro denominated deposits. This stops any emerging practice that may have been recently witnessed in the local banking sector.
Credit institutions who have already entered into agreements entailing such negative interest rates, need to rectify their position within a 3-month transition period. Subject to certain conditions, a maintenance fee may be charged in case of excessively high balances.
Click here to access The Circular.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
