The Bank of Cyprus has decided to release the 6 month time deposits that were blocked in relation to the recapitalisation of the Bank in 2013. Taxand Cyprus takes a look at how this will bolster the banking system.
As per the recapitalisation arrangement the bank had seized 47.5% of uninsured deposits exceeding €100,000 and converted them into equity.
The remaining were blocked in 6 month, 9 month and 12 month fixed term deposits with the bank maintaining the right to renew them automatically. The 6 month deposits matured on 31 January 2014.
The released funds will be subject to all the capital controls currently applicable in the Cypriot banking system.
As per the announcement published by the BOC, the bank’s improving liquidity position and the stabilising signs of its deposit base were the decisive factors for the release of deposits.
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