My bank says that too but it's really just 6 numbers because the characters map to the same numbers as on a telephone's key pad. So, if your password is ABC123, it's really just "222123", and both will work to log in.
The interesting thing to note is that if they had any significant problem with this scheme, they would have changed it. Maybe we worry too much about the strength of passwords. The password verification process may be hardened enough, even for the needs of a bank.