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NEWS FROM CYPRUS: TRANSACTION RESTRICTIONS EXTENDED, SUBSIDIARIES OF CYPRUS ARE STILL IN UKRAINE
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- Published on Friday, 05 April 2013 14:13
Restrictions on the capital movements in Cyprus, which were introduced on March 28, will be extended for one more week. This was reported by the representative of Central Bank of Cyprus Yangos Demetriou.
Conditions of limitations, however, again relaxed. Thus, the amount of transactions, that do not require the coordination with the regulator, increased by 5 thousand to 25 thousand euros. Check cashing up to $ 9 thousand per month was also allowed. At the same time in the ATMs of Cyprus, it’s impossible to withdraw an amount of more than 300 euros per day and to take outside the country more than 1 thousand euros per person. Earlier, the authorities stated that in order to prevent mass withdrawals from accounts, limitations will apply no more than a week.
The decision to limit capital movement associated with the restructuring of the banking system, which is held in Cyprus. These and other reforms, in turn, are the conditions of obtaining financial aid from international lenders of 10 billion euros. The reason for this was the financial crisis in Cyprus, which has excited not only the holders of offshore bank accounts on the island, but also customers of Cypriot subsidiaries in Ukraine. The Ministry of Finance of Cyprus has obliged the country's largest financial institutions - Bank of Cyprus and the Cyprus Popular Bank (Laiki) - to sell its subsidiaries. In Ukraine there are two subsidiary banks: Bank of Cyprus and Marfin Bank (Cyprus Popular Bank).
However, UIIA reports that the Bank of Cyprus Group does not intend to sell its subsidiary, and to reduce the presence of any segments of business in Ukraine. Press service of financial institution explains the statement that "Bank of Cyprus" in Ukraine is a separately capitalized Ukrainian subsidiary, which is subject to Ukrainian supervision and regulation. It specifies that the Eurogroup decision regarding the Cyprus economy, and banks in particular, are spreading their influence on operations in Cyprus, Greece and some operations in the UK. Over time, the parent company Bank of Cyprus will be combined with the "good" assets of Laiki Bank. The merger of the Bank of Cyprus and Marfin Bank in Ukraine isn’t planned.
The Bank of Cyprus and Marfin Bank had previously stated that their activities will not change because of problems in the parent structures. The institutions are also unaware about their possible sale.