News / Europe

Cyprus Banks Reopen to Huge Crowds

Cypriot Banks Reopen Thursdayi
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March 28, 2013
Cyprus's banks are set to re-open Thursday after being closed for nearly two weeks. Under a deal with international creditors, the government has imposed strict controls on how much money depositors can withdraw to prevent a collapse of credit institutions. Zlatica Hoke reports.

Cypriot Banks Reopen Thursday

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VOA News
Banks across Cyprus reopened as scheduled Thursday, nearly two weeks after being shutdown amid the island's near-economic collapse.

Depositors formed long lines on the sidewalks and streets outside their banks long before the doors were unlocked at noon local time (10:00 GMT), anxiously awaiting access to their accounts.

The banks will stay open for just six hours and people will only be allowed to withdraw $383 a day from their accounts.  Travelers leaving the Mediterranean island can take no more than $3,831 to other countries.  The strict restrictions were imposed to prevent a massive run on accounts that could trigger a catastrophic bank failure.

Security

Security around was tight Wednesday evening as armored trucks delivered thousands of euros to the bank, as employees prepared to resume operations.

Cyprus banks have been closed since March 16 while the government negotiated a $13 billion bailout from European neighbors, the European Central Bank and International Monetary Fund.  As part of the deal, Cyprus agreed to confiscate 40 percent or more from the biggest, uninsured accounts above $130,000 to help pay for the rescue.

Cyprus Bailout

  • Agreed to on March 25
  • Worth $13 billion
  • Keeps Cyprus in the eurozone
  • Closes the island nation's second largest bank - Laiki Bank
  • Laiki accounts larger than $130,000 will be moved to a "bad bank" and used to raise bailout money
  • Laiki accounts with less than $130,000 euros will be moved to Bank of Cyprus
  • Bank of Cyprus will be restructured
The deal also forces the restructure of the Bank of Cyprus, the island's largest lender. The bank will absorb some of the assets of Cyprus's second-largest bank, Cyprus Popular, also known as Laiki, which is being shut down.

Bank of Cyprus chief executive Yiannis Kypri was dismissed by the nation's central bank, following the appointment of a special administrator for the lender. The bank's chairman submitted his resignation after the administrator was appointed, but the bank board rejected his request.

Cyprus is the fifth of the eurozone nations where billions of dollars in bailouts have been needed to ward off bankruptcy, following Greece, Portugal, Ireland and Spain.

  • People line up outside a branch of Cyprus' Housing Finance Corporation, a state-run bank that mainly helps low and middle income people, in capital Nicosia, March 29, 2013.
  • Supporters of the extreme right group National Popular Front (ELAM) take part in an anti-bailout protest outside parliament in Nicosia, Cyprus, March 28, 2013.
  • A Laiki Bank manager helps a police officer enter the bank after getting past depositors waiting outside the bank's branch in Nicosia, Cyprus, March 28, 2013.
  • People wait to enter at a branch of Laiki Bank shortly after it opened in Nicosia, Cyprus, March 28, 2013.
  • People wait for the opening of a branch of Laiki Bank in Nicosia, Cyprus, March 28, 2013.
  • A man walks with a parrot on his hat in front of a Bank of Cyprus branch before it opens in Nicosia, March 28, 2013.
  • A man reacts outside a branch of the Bank of Cyprus in Nicosia, March 28, 2013.

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