The Central Bank of Cyprus has issued a statement confirming that Bank of Cyprus deposit amounts that were above EUR100,000 on March 26 will be 37.5% converted into bank shares, and that a further 22.5% may be subjected to the same measure within 90 days of a valuation of the Bank of Cyprus by an independent valuer. However, a senior bank official, Mario Skandalis, was quoted ahead of the official announcement as describing the likelihood of a total 60% conversion as a "remote possibility."
The statement also confirmed that a depositor's total loans and credit facilities will be taken into account in determining whether they have reached the EUR100,000 threshold, and that deposits in joint accounts will be divided by the number of individual depositors. The extra 22.5% that may or may not become shares will be frozen and unable to accrue interest, although the amount that is not finally converted will be eligible for retrospective interest, and a small increment will be added. Deposits made after March 26 are not affected by any of these measures.
The move forms part of efforts to raise EUR5.8bn in order to qualify for a EUR10bn EU bailout. Plans for a one-off tax on all depositors, which was favoured by Finance Minister Michalis Sarris, were rejected by Parliament following protests. Strict limits on withdrawal amounts remain in place.
Good or bad for our situation considering having more than 1 million euro with this bank deposit?
The statement also confirmed that a depositor's total loans and credit facilities will be taken into account in determining whether they have reached the EUR100,000 threshold, and that deposits in joint accounts will be divided by the number of individual depositors. The extra 22.5% that may or may not become shares will be frozen and unable to accrue interest, although the amount that is not finally converted will be eligible for retrospective interest, and a small increment will be added. Deposits made after March 26 are not affected by any of these measures.
The move forms part of efforts to raise EUR5.8bn in order to qualify for a EUR10bn EU bailout. Plans for a one-off tax on all depositors, which was favoured by Finance Minister Michalis Sarris, were rejected by Parliament following protests. Strict limits on withdrawal amounts remain in place.
Good or bad for our situation considering having more than 1 million euro with this bank deposit?
