- Sale of Laiki’s Business in Cyprus to the Bank of Cyprus
- Insured deposits, up to €100,00, have been transferred to the Bank of Cyprus
- For deposits of more than €100,00: the amount up to €100,000 will be transferred to the Bank of Cyprus, as part of the “Good Laiki”. The rest of the amount will remain in “Bad Laiki” could be tied up for up to 3 years.
- Loans and credit facilities are transferred to the Bank of Cyprus, unless they fall in the category as to remain in the “Bad Laiki”. A set off between loans and deposits will take place.
- Shareholders, Bondholders and creditors of Laiki will be transferred to the Bank of Cyprus.
Bank of Cyprus
If aggregated deposits of one customer, held on March 26, 2013, is more than €100,000, then that amount shall be treated as follows:
– Loans and credit facilities are deducted from the deposits exceeding €100,000. For the remaining amount the following shall apply:
- 37,5% is converted into Class A shares of the Bank of Cyprus (voting rights and dividends)
- 22,5% is temporarily frozen, until an independent valuer is appointed that will decide whether it will be converted partly or all into Class A shares. This will be completed in 90 days from the completion of the valuation (if 22,5% is re-deposited then interest and increment will be given retrospectively)
- 30% is temporarily frozen and will be unfrozen soon. Interest on this amount is still calculated and an increment of 10 basic points.
- 10% has been unfrozen, after the instructions of the Central Bank of Cyprus, on the 2nd of April 2013.
Multiple deposits accounts: the deposit amount will be considered as the sum of all the accounts.
The following measures have also been proposed but not approved yet:
- Increase of corporate tax from 10% to 12,5%
- Increase of the withholding tax on interest on deposits from 15% to 30% (this applies only to Cyprus tax residents)
- Increase of the withholding tax on payment of dividends from 20% to 30% (this applies only to Cyprus tax residents)
Temporary restrictive measures on transactions of Cyprus Banks (Latest Update)
The Central Bank of Cyprus has applied the below measures and restrictions but these are temporary in order to regulate the flow of capital in Cyprus and safeguard the stability of the economic system. These measures are being reviewed and changed as the days passes. The Central Bank of Cyprus has announced the fourth set of measures, relaxing their previous to great extent restrictions. The current restrictions are as follows:
1. Each individual is allowed to withdraw on a daily basis in cash the amount of €300.
2. Cheques are not allowed to be cashed immediately; these can only be deposited in an account and then restrictions mentioned above applicable.
3. Any non-cash payment or money transfer outside the Republic of Cyprus or to any account maintained from another credit institution is not allowed, other than:
(a) Payments through cheques to accounts held in another credit institutions up to €9,000 per month per natural person in each credit institution.
(b) Payments to other credit institutions for transaction that fall within the normal business activity of the customer upon presentation of justifying documents as follows:
(i) Any payments from €25,001 to €200,000 will have to be approved by the Committee. The Committee will take its decision in 24 hours according to the availability of cash in the Bank.
(ii) Any payment above €200,001, subject to prior approval by the Committee, at the request of the credit institution. The Committee will take tis decision in 24 hours according the availability of cash in the Bank.
(c) Payments to accounts held abroad for transactions that fall within the normal business activity of the customer upon presentation of justifying documents as follows:
(i) Payments of up to €5,000 per day per account are not subject to any restrictive measure. (However the Committee may ask for information for these payments)
(ii) Any payments from €5,001 to €200,00 will have to be approved by the Committee. The Committee will take its decision in 24 hours according to the availability of cash in the Bank.
(iii) Any payment above €200,001 subject to prior approval by the Committee, at the request of the credit institution. The Committee will take its decision in 24 hours according the availability of cash in the Bank.
(iv) Payments for salaries of employees upon presentation of supporting documents.
(d) Maintenance costs up to €5,000 per quarter including tuition fees of a person studying abroad and first degree relative is a person who is ordinarily resident in the Republic. Payments for maintenacne expenses are allowed only when supporting documents are shown to the bank and these should be presented to the bank by a first degree relative. A birth certificate or a confirmation would be accepted.
(e) Any payments or money transfers via debit, credit, or prepaid card, up to € 5,000 per month per person per Bank.
(f) Termination of deposits before the expiry date is not allowed unless the funds will be used for paying off loans within the same bank.
(g) The restrictive measures will apply to all accounts, payments and transfers regardless of the currency domination.
(h) For travelling abroad more than €1,000 per person/per journey is not allowed to be taken outside the Republic.
The above restrictions are not applicable to the below:
- Any new funds transferred from abroad to Cyprus;
- Change of cheque that is issued by a foreign bank and/or withdrawal of cash through debit, credit or through prepaid card issued by foreign banks;
- Withdrawal of cash from foreign account;
- Withdrawal of cash from Credit Banks through the Central Bank;
- The Cyprus Government Authorities;
- The Central Bank of Cyprus;
- Payments that have been approved by the Committee;
- Diplomatic Missions