Cyprus to issue the eleventh decree on capital controls shortly

The Cypriot authorities are expected to issue shortly the eleventh decree on capital controls imposed on the island`s banking sector following a Eurogroup agreement over a €10bn euro international bailout that forced major depositors at its two biggest lenders to pay part of the cost of the rescue.

Under the tenth decree, issued on April 25, Payments and money transfers (for any purpose) from one financial institution to another within Cyprus have been extended from €3,000 to €10,000 monthly per individual.
Payments and transfers from one bank to another within Cyprus are now capped at €300,000 per transaction for the purchase of goods and services. Any transactions over and above this amount – again for the purchase of goods or services – are permitted provided that documentation is presented.

Payments and/or transfers within the country, for transactions falling under a bank account holder’s usual business activity, are extended to €500,000 per transaction on submission of documentation; for amounts above €500,000, approval is required from a special supervisory committee.
Money transfers abroad per individual per month (for any purpose) are extended to €5,000 from €2,000 previously.

Payments within the country via debit, credit or prepaid card are allowed. And persons travelling abroad may take with them €3,000 per trip (from €2,000) or the equivalent in another currency.
Under the €10 billion financial assistance agreement, Cyprus Popular Bank, the island’s second largest lender will be wound down, with its uninsured deposits (over €100,000) estimated to take losses up to 80%. The bank’s good part (assets and insured deposits below €100,000) will be absorbed by Bank of Cyprus, the island’s biggest lender, whose insured depositors may take losses up to 60%.