Cyprus FinMin issues a Decree for BoC

Finance Minister Charis Georgiades issued Tuesday the Enforcement of Temporary Restrictive Measures on Transactions of Bank of Cyprus Public Co Ltd. Decree, of 2013.

According to an official press release issued here today, the decree summarily states:

Following the exit of Bank of Cyprus from resolution regime, 12% of the deposits of each natural or legal person which were blocked will now be released and transferred to a current/sight account within Bank of Cyprus.

Additionally, the remaining 88% of the deposits that were blocked will be converted into three equal new fixed term deposits with a term of 6,9 and 12 months respectively within Bank of Cyprus with a higher interest rate.

Restrictive measures on fixed term deposits are included in the decree:

(a)On the first maturity of the fixed term deposit, there is a provision for renewal for another period of the same duration by Bank of Cyprus.
(b) The termination of the fixed term deposit is prohibited unless it will be used for:

(i) repayment of loan and / or overdraft and / or credit card within the Bank of Cyprus.
(ii) to create two or more fixed term deposits

As part of a €10 billion rescue package for Cyprus, Bank of Cyprus, the island`s largest lender, entered a resolution process, with an initial 60% of deposits over €100,000 blocked for capital to equity conversion to recapitalize the bank.

However, the final figure was reduced at 47.5% following the completion of an independent evaluation of the Bank`s balance sheet, after it absorbed the "good part" of Laiki Bank which will be wound down.