Cyprus restrictions on bank transactions to be lifted by spring 2014

Published:  1 Nov at 6 PM
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Expats living in financially-troubled Cyprus may be relieved to hear that the process of undoing the currency controls imposed last spring in order to prevent the collapse of its banking system may soon be complete.

Whilst presenting the government’s budget statement for 2014, the Cypriot finance minister Harris Giorgiades had warned that the year to come would be extremely difficult for residents of the popular holiday island. Some months in, a number of the imposed currency controls have been scrapped, and all the measures introduced after the bailout are expected to go by spring 2014.

However, measures not yet cancelled include regulations which have made it difficult for expats who have sold up to transfer the proceeds to their UK or other foreign bank accounts. Those travelling abroad can now take out €3,000, as the limit has now been raised from the original €1,000, and the business transaction threshold has also been raised from €500,000 to one million euros.

Other restrictions imposed after the bailout which will stand until spring 2014 include the daily withdrawal limit of €300, the ban on cashing cheques, the ban on opening an account at a second Cypriot bank and the ban on breaking fixed-term deposits. The relaxation of rules for individuals’ transfers between banks allows a limit of €15,000 with no need to obtain approval.

The new decree announced last Friday was number 22 in a long line of measures and counter-measures originally aimed at preventing a run on Cypriot banks exposed to the Greek financial meltdown. Depositors were forced to accept losses stemming from the winding down of Laiki Bank and the position of the undercapitalised Bank of Cyprus.
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