Lm deposit accounts to be automatically converted to euro

"All deposit accounts denominated in Maltese lira, irrespective of whether these are fixed, savings or current, will be automatically converted to euro at the irrevocable fixed convergence rate at no expense to the client," John Cassar Torreggiani, executive head responsible for the Euro Changeover Programme at Bank of Valletta, said during a training session with BOV employees.

"It is planned that Malta adopts the euro as its national currency as from the January 1, 2008, and, in that case, all bank deposit accounts in Lm will automatically convert to euro as the clock welcomes the new year.

"In the case of fixed deposits, the rate of interest will continue to apply for the term of the account. As such, if a customer opens a fixed account for one year at 4 per cent interest per annum, this rate will apply for the full duration of the term even if, in the meantime, the account is automatically converted to euro."

He said that this is a factor that customers ought to consider, especially since, currently, the Maltese lira base rate is higher than that applicable for euro.

Mr Cassar Torreggiani explained that BoV's recommendation to its customers is to deposit their cash into a deposit account of their choice and to limit the amount of cash according to their normal requirements.

"By depositing excess cash into a deposit account, customers would not only avoid having to seek to convert their Maltese lira cash balances to euro by physically going to the bank after e-day but, in the meantime, they would also be earning interest on their money."

The training sessions form part of BoV's euro changeover strategy that is based on three main pillars: communication, cash management and information technology. To strengthen its communication strategy, the bank has embarked on an intense euro changeover communication programme for its staff members, the business community and the public.

The bank's euro changeover committee is currently organising a series of information sessions targeting all BoV employees. More information on the euro changeover is available on the BoV's Website www.bov.com.