Cyprus Bank`s deposit owners to lose up to 77% of their money
Baku, March 30 (AZERTAC). The owners of deposits over 100,000 euros in the bank of Cyprus will lose between 60% and 77.5% of their money, New York Times reports referring to the estimates of lawyers and bankers.
Under the conditions of the bank`s restructuring Bank of Cyprus 77.5% of deposits will be transferred into shares of different class.
If the restructuring is successful and Cyprus` economy recovers the owners of the shares will be able to sell their shares and to return part of the money. In any case they will be managed to return less than 40% of their money.
The international creditors (the IMF, the ECB and the European Commission) are to announce the conditions of the bank`s restructuring later on Saturday.
The Central Bank of Cyprus has extended restrictions on banking operations for a further five days according to an executive order issued on Friday evening.
On March 29th the central bank of the island state temporarily removed all restrictions on internal financial operations involving debit cards and credit cards.
The Bank of Cyprus has not operated since March 15th but on Thursday resumed work under strict control over the movement of capital.
In particular, there was a 300 Euro a day limit on cash withdrawals and people were only allowed to take 1,000 Euros out of the country per trip.
The Cypriot central bank on Friday lifted all restrictions on domestic credit and debit card payments, which were imposed amid concerns of a bank run following the island`s EU-led bailout.
It issued a new decree on capital controls, changing restrictions that were published on Wednesday banning all domestic payments and transfers over 5,000 euros ($6,400) without permission from the authorities.
Cyrus`s government has agreed with the “three” of Cyrus`s creditors (the EU, the European Central Bank and the International Monetary Fund) that the stocks of Cyrus`s Central Bank will not be annulled.
This information was published in the Greek newspaper “Ta Nea”. The paper also predicts that the bank`s stocks will go down in value considerably but Cyprus will raise the necessary funds by confiscating deposits which exceed € 100,000.
On Tuesday, Cyprus`s Supreme Court “froze” the procedure of liquidating bond-like papers of 105,000 shareholders of the country`s Central Bank up to April 5. Now, they have the possibility to save some part of the money which they invested in the bond-like papers.
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