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BoC unlocks 950 million euros, are on 6-month deposit

BoC unlocks 950 million euros, are on 6-month deposit

Tags: Economy, banks, deposits, Central Bank, the IMF, the ECB

Bank of Cyprus (Bank of Cyprus), contrary to the opinion of the "troika" of international creditors formally announced his decision to unlock 950 million euros, are redeemable on January 31 6-month deposit.

As the chairman of the board of directors of the largest on the island of the credit institution Christis Hasapis, this step was "the result of consultations with the Ministry of Finance and the Central Bank of Cyprus."

"The determining factor in this particular decision was the significant improvement in the liquidity of the bank in the past few months and that there was evidence of stabilization of its deposit base," - said Hasapis.

According to him, the decision of the bank's board of directors is responsible for the trust shown by its depositors, and implements public expectations in regard to support liquidity in the real economy.

Ministry of Finance and the Central Bank of Cyprus also issued a joint statement in which they stressed that the decision of the Bank of Cyprus "suggests that our banking system is on the way of stabilization." "This step will help to strengthen public confidence and investors in the banking sector of the country," - said in a statement.

The official announcement of the release of the 6-month deposit was made after intensive negotiations on Wednesday with the representatives of the "three" creditors who arrived on the island (the European Commission, the European Central Bank and the International Monetary Fund). Earlier, the newspaper "Cypress mail" reported that creditors are skeptical about such a deal in the conditions of continuing instability of the financial situation in the country. However, they can not directly prohibit doing so, since such a step is entirely in the jurisdiction of the Bank of Cyprus, which left the outer management in the summer of last year.

The Bank of Cyprus was the first bank in the EU, for restructuring which the authorities resorted to forcibly raising the funds of major investors to recapitalize it as a result of the agreement reached in March 2013 with EU and IMF creditors on the conditions for receiving anti-crisis aid amounting to 10 billion euros. In July last year, the bank actually wrote off 47,5% of deposits exceeding 100 thousand euros, exchanging them for shares. The rest of the funds were frozen. Some of them were placed on deposits of different terms - on 6, 9 and 12 months. And the Bank of Cyprus has the right to unilaterally renew one deposit for one more period without taking into account the wishes of the client. However, the management of the bank decided not to use this right in respect of the six-month deposit, which expires on 31 January of this year.

About half of the major contributions to the Bank of Cyprus belonged to non-residents of countries outside the EU, primarily - from Russia. Through a process of recapitalization of the bank's board of directors included a group of Russian businessmen rightly major contributors. At the moment of the members of the Board of Directors 15 5 - representatives of Russia.

Unlocked means will not be able to leave the island as soon fall under the same restrictions, which since the end of March last year apply to all funds in Cypriot banks. Capital controls on the island was introduced to prevent the withdrawal of funds from the banking system and its transfer abroad.

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