The Decree

As a result of the significant liquidity squeeze in the local market and the risk of an outflow of deposits, the Finance Minister, following the recommendations of the Governor of the Central Bank of Cyprus, has introduced certain temporary restrictive measures with respect to banking and cash transactions as summarised below:

(a) The maximum amount of cash withdrawal shall not exceed €300 daily or its equivalent in foreign currency, per person in each credit institution. All cash withdrawals (namely withdrawals via debit and or prepaid cards, withdrawals from the credit institution’s tellers and withdrawals via credit cards against a sight/current account’s balance) are computed per person consolidating all accounts held by the said person in each credit institution. Provided that any part of the maximum cash withdrawal allowed daily which is not withdrawn by the beneficiary during the day in which the limit applies, may be withdrawn at any time afterwards.

(b) The cashing of cheques is prohibited.

(c) Cashless payments or transfers of deposits/funds to accounts held abroad or in other credit institutions are prohibited, with the exception of:

  • Payments for transactions that fall within the normal business activity of the customer upon presentation of justifying documents as follows:
  • Payment of up to €5.000 per day per account is not subject to any restrictive measure.
  • Payment from €5.001 to €200.000 is subject to the approval of the Committee. A list of the requests for payments falling within this category shall be submitted to the Committee by the relevant credit institution on a daily basis and shall mention the amount of each payment, the total amount of all payments as well as the number of payments falling within this category. The Committee for its decision, which shall be taken within 24 hours, shall take into account the liquidity buffer situation of the credit institution.
  • Payment above €200.000 provided the prior approval of the Committee is obtained after taking into account the liquidity buffer situation of the credit institution.
  • Payment of employee salaries upon presentation of supporting documentation.
  • Accommodation expenses of up to €5.000 per quarter and tuition fees of first degree relatives studying abroad subject to the presentation of the relevant supporting documents. Tuition fees shall be paid only to the beneficiary educational institution, upon submission of the relevant justifying documents.
  • Payments or money transfers outside Cyprus through debit, credit or prepaid card up to €5.000 per month per person for each bank.

(d) The termination of a fixed term deposit prior to its maturity date is prohibited unless the funds will be used for the repayment of loans within the same credit institution.

(e) On the first maturity of fixed term deposits, the higher amount between €5.000 or 10% of the total amount of the deposit in question, shall, according to the choice of the depositor, either be transferred to a sight/current account or be deposited in a new fixed term deposit in the same credit institution. For the remaining amount the maturity shall be extended for one month.

(f) Sums transferred from a fixed term deposit to a sight/current account shall be subject to the restrictive measures applicable to sight/current accounts

(g) Persons travelling abroad may carry Euros or foreign currency notes up to €1.000 (or the foreign currency equivalent) for each trip abroad.

(h) Financial transactions, payments or transfers which have not been completed prior to these measures coming into effect, are subject to the above restrictions. Provided that any financial transaction, payment and or transfer, which has not been processed by the credit institution prior to the entry into force of this Decree shall be cancelled and will have to be submitted anew.

(i) The restrictions are applicable to all credit institution accounts, payments and money transfers irrespective of currency.

The restrictions do not apply to the following:

  • Funds transferred from abroad to Cyprus
  • Withdrawal of cash using credit and or debit and or prepaid card issued by foreign institutions on accounts abroad
  • The cashing of cheques issued on accounts held with foreign institutions abroad
  • Cash withdrawals from accounts of credit institutions with the Central Bank
  • Diplomatic missions
  • The Republic of Cyprus
  • The Central Bank of Cyprus

These measures will be in force for a period of seven days commencing on 27 March 2013.

Transactions with Laiki Bank and Bank of Cyprus

Laiki Bank

  • The balance on all credit balances in the name of a depositor (including current, notice and fixed-term deposit accounts) in excess of €100.000 are frozen and will be transferred to the “bad bank”.  Funds up to €100.000 can be used to effect payments, (subject to the conditions mentioned above).
  • Funds which are transferred to the bank accounts after 28 March 2013 can be used to effect payments (subject to the conditions mentioned above).

Bank of Cyprus 

  • The balance on all credit balances in the name of a depositor (including current, notice and fixed-term deposit accounts) in excess of €100.000 are frozen until the part conversion into equity is completed.  Funds up to €100.000 can be used to effect payments, (subject to the conditions mentioned above).
  • Funds which are transferred to the bank accounts after 28 March 2013 can be used to effect payments (subject to the conditions mentioned above).

Frequently Asked Questions

(1) Can cheques be deposited into an account held with a credit institution?

Cheques issued from an account held with one credit institution can only be deposited into an account held with the same credit institution. For cheques relating to business transactions within the ordinary carrying on of the business of a client (for example payment by a client of the account holder for services offered supported by the issuance of an invoice), the provisions of paragraph (c) above apply.

(2) Are there any restrictions on notice accounts?

No, however it is unlikely that the credit institution will repay any funds prior to the full contractual notice being given.

(3) Can entities (companies, institutions etc) withdraw cash?

Yes, the measures apply to all account holders (either individual or institutional).

(4) Can I pay hotel and restaurant bills using my credit card abroad?

Yes, subject to the limit of €5.000 per month, per person, for each credit institution.

(5) Can I continue to pay my loan instalments from my current/sight account?

Yes, assuming that the loan is with the same credit institution.

(6)  Can I transfer funds between accounts within the same credit institution?

Yes.

(7) Can I transfer amounts between different credit institutions within Cyprus?

No, unless they relate to payments of business transactions in the ordinary course of the client’s business and for which the provisions of paragraph (c) above apply.

(8) Under the current restrictions, will sight/current accounts be automatically converted into fixed deposit accounts?

No.

(9) Are there any restrictions for transfers received from abroad?

No restrictions apply for incoming funds. Money received from abroad can be used for any purpose either in Cyprus or abroad without any restrictions.

(10) Can I access my fixed time deposit after it matures?

Yes, subject to the restrictions set out in paragraphs (e) and (f) above.

(11) Is there a maximum limit for the number of transactions allowed for transfers abroad?

No, provided that the cumulative amounts are within the limits and the purpose of the transfer is as prescribed by the Decree.

(12) Can I pay my employees’ salaries in their bank accounts outside Cyprus?

No, unless the employees are based outside Cyprus and relevant supporting documentation can be presented.

(13) Which institutions fall within the scope of these restrictive measures?

These measures apply to all banks, cooperatives and the Housing Finance Corporation, operating in Cyprus under the relevant laws.

(14) For how long will these measures be in force?

These measures will be in force for a period of seven days commencing on 27 March 2013. However, according to the relevant legislation, the Minister of Finance has the power to extend, amend or cancel these restrictions.