An absolutely ludicrous situation

An elderly friend of ours, age 84 and not in very good health, deposited the funds from the sale of his property in Cyprus with the Cooperative Bank in May 2011. He has two separate bonds with the bank, one maturing May 2013 and the next in October 2013. He informed the bank that he would not be able to get to Cyprus until June and would like to draw the bond proceeds out at that time. He was told that the money would be held in the bond so that he wouldn’t lose any interest but wasn’t informed of any time span. When he arrived here in June for a two week holiday, he found out the funds had been invested for a further 3 months and he therefore couldn’t touch the money until August.

He went into the bank today with written instructions to transfer the bond proceeds into his current account at the new maturity date and was told that he had to attend in person on the maturity date and that he couldn’t transact the business on any other date. On that date, he would only be allowed to transfer 20% of the bond proceeds to the current account and then a further 20% in 3 months time, again having to attend personally at that time.

This seems absolutely ludicrous, is the bank hoping he will die before he gets chance to take his money out. He fully understands the reasoning behind capital controls, but surely there is more flexibility regarding the dates and having to appear in person. I am unaware, having worked in the UK banking industry for many years, of any organisation that will not accept written instructions, brought in personally by the investor. It will entail air fares to and from Cyprus plus hotel costs as he cannot at his age be expected to do all that in one day.

 

Name and address withheld

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