Banking authorities have imposed restrictions on bank transactions to prevent an outflow of deposits. Fears of a rush on the banks did not materialize during the two days of bank operations after a 12-day closure and some of the restrictions have been relaxed.
A ban check payments was eased and importers were allowed to make payments to government agencies by check up to 5,000 euros, with larger sums requiring approval by the Central Bank.
According to banking authorities, further relaxation on bank transactions are due in the next few days to mainly facilitate commercial operations, but inter-bank transfers and withdrawal of large sums are not expected to be allowed soon.
According to latest figures released by the Central Bank, almost one third of deposits in Cypriot banks come from abroad.
Total deposits in Cypriot banks at the end of February stood at 67.515 billion euros, marking a drop of 905 million euros from 68.42 billion euros in January. Deposits from EU countries amounted to 3.89 billion euros and from third countries to 20.97 billion euros.
Cypriot authorities are concerned that a large proportion of foreign deposits may leave Cypriot banks once restrictions are lifted to the satisfaction of European critics, mostly Germans. They had maintained all along that the Cypriot banking sector had overgrown disproportionately to the islands annual 17.5 billion euro economy.
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