Cypriots queue as banks reopen with tough curbs

Cypriots queued calmly at banks as they reopened on Thursday under tight controls imposed on transactions to prevent a run on deposits after the government was forced to accept a stringent EU rescue package to avert bankruptcy.

By Karolina Tagaris And ?michele Kambas (Reuters)

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Published: Fri 29 Mar 2013, 11:34 PM

Last updated: Fri 3 Apr 2015, 5:09 AM

Banks were shut almost two weeks ago as the government negotiated a €10 billion ($13 billion) international bailout, the first in Europe’s single currency zone to impose losses on bank depositors.

Bank staff turned up for work early as cash was delivered by armoured trucks, and queues of at least a dozen people formed at branches in the capital, with uniformed security guards on duty.

Doors opened at noon (1000GMT) but initially at least there was no sign of any major run on the banks, as had been feared.

Authorities say the emergency rules imposed to limit withdrawals and prevent a bank run will be temporary, initially for seven days, but economists say they will be difficult to lift as long as the economy is in crisis.

A Finance Ministry decree limited cash withdrawals to no more than €300 per day and banned the cashing of cheques.

The island’s central bank will review all commercial transactions over €5,000 and scrutinise transactions over €200,000 on an individual basis. People leaving Cyprus may take only €1,000 with them.

A police source told Reuters that passengers leaving Cypriot airports were subject to extra searches. Officers had orders to confiscate cash above the €1,000 limit.

With just 860,000 people, Cyprus has about €68 billion in its banks — a vastly outsized financial system that attracted deposits from foreigners, especially Russians.

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