27 Mar 2013

Cyprus banks remain shut as talks continue

6:50 am on 27 March 2013

Details have emerged of tough measures under discussion to guard against a run on banks in Cyprus when they reopen.

The BBC reports a draft document suggests Cyprus plans to impose a weekly limit on withdrawals, an export limit on euros, and a ban on cashing cheques.

Banks in the country have been shut since 15 March as a controversial bailout to prevent the country going bankrupt was negotiated, which will see depositors take losses.

The banks are being overhauled as part of the bailout and Cypriot authorities had previously said all that but the biggest two institutions would open on Tuesday.

The bailout deal with the International Monetary Fund and the European Union releases €10 billion in support, but to qualify for the funding Cyprus must raise €5.8 billion.

Cyprus's finance minister has confirmed that depositors with more than €100,000 could see 40% of their funds converted into bank shares.

But Michalis Sarris also said that Cypriot depositors with less than €100,000 in their accounts "will not be hit".

The head of Cyprus's biggest commercial bank has resigned following the deal. Local media reports said Bank of Cyprus chairman Andreas Artemis objected to conditions imposed on the bank.