Worldway Immigration Agency's Cyprus Customer Service Center reported on March 24: Due to the impact of the Greek debt crisis, the banking sector in Cyprus is currently facing two challenges.
Photo of a Cypriot bank sent by the staff of Worldway's Cyprus Customer Service Center
On one hand, the Eurozone and the International Monetary Fund will only provide the Cypriot government with a €10 billion subsidy, while the remaining €5.8 billion must be raised by the Cypriot government itself. On the other hand, the European Central Bank has issued an ultimatum to Cyprus, requiring a solution that satisfies all parties by March 25 (Monday).
In response, the Cypriot government is taking active measures. After the first deposit tax proposal was rejected, Cyprus convened an emergency meeting again. At midnight on the 22nd, the parliament passed part of the rescue bill: the establishment of a "Solidarity Fund"; authorizing the government to implement controls on bank funds, allowing depositors to withdraw no more than €260 in cash per day through ATMs, which was later reduced to a limit of €120; and facilitating mergers and acquisitions of banks to help raise funds to meet the requirements for EU assistance.
On the 23rd, the parliament discussed the most controversial deposit tax proposal, considering a plan to tax deposits exceeding €100,000 in the country's largest bank, Bank of Cyprus, at a rate of 40%, while exempting the other 26 foreign banks operating in Cyprus from taxation. Taxed depositors would receive bank shares as compensation. This bill has not yet been finalized and will be submitted to the Eurogroup for approval.
Photo of locals withdrawing money taken by Worldway's Cyprus Customer Service Center staff in Paphos
According to staff from Worldway Immigration Agency's Cyprus Customer Service Center, it is indeed observed that some residents are queuing at bank ATMs to withdraw cash, with more people in Nicosia, and some in Paphos, but not as many as expected. Local residents are living orderly lives, and everyone is going about their work as usual, with no protests or extreme statements, but people are very concerned about policy changes and are waiting for the latest news from the government.
