30 July 2013

The Enforcement of Temporary Restrictive Measures on Transactions of Bank of Cyprus Public Co Ltd. Decree, of 2013

  • The present Decree shall be cited as the Enforcement of Temporary Restrictive Measures on Transactions of Bank of Cyprus Public Co Ltd. Decree, of 2013.
    • In the present Decree, unless a different meaning results from the context:
      “affected deposit” means deposit within Bank of Cyprus which will originate on the 30th July 2013, at 17:00, as a result of a written notification of the Resolution Authority, as defined in the Resolution of Credit and Other Institutions Laws or 2013, from the conversion of titles, governed by the terms of Annexes A and B of the Bailing In of the Bank of Cyprus Public Co. Ltd. Decree, of 2013, into deposits.
      “Bank of Cyprus” means the Bank of Cyprus Public Co Ltd.
      “compliance officer” means the compliance officer as defined in section 69 of the the Prevention and Suppression of Money Laundering Activities Law·
      “Law” means The Enforcement of Restrictive Measures on Transactions in case of Emergency Law of 2013.
    • Terms not otherwise defined in this Decree shall have the meaning ascribed to them by the Law.
  • By virtue of sections 4 and 5 of the Law, following a recommendation by the Governor and with the consent of the Governor, the following restrictive measures are imposed on affected deposits:
    • 12% of the total affected deposit of each natural or legal person is transferred to a current/sight account within Bank of Cyprus and is subject to the provisions of any other Decree issued by virtue of the Law:
      Provided that for the purposes of implementation of the present provision, Bank of Cyprus may open a new current/sight account for each natural or legal person which does not maintain a current/sight account within Bank of Cyprus.
    • The remaining 88% of the total affected deposit of each natural or legal person is converted into three equal new fixed term deposits with a term of 6,9 and 12 months respectively within Bank of Cyprus. The terms of this new fixed term deposit are the following:
      • on the first maturity of the fixed term deposit, the Bank of Cyprus, at its sole discretion, taking into consideration its liquidity situation and after consultation with the Ministry of Finance and the Central Bank of Cyprus, may transfer part or the whole of the capital of the said fixed term deposit, to a new fixed term deposit with a term equal to the term of the initial fixed term deposit.
      • the interest rate of the fixed term deposit shall be equal to the average interest rate paid by the Bank of Cyprus, weighted by the volume of individual deposits, on the date of entry into force of the present Decree or on the date of transfer to a new fixed term deposit as per sub paragraph (i), on other fixed term deposits of the same term increased by 10 basis points for a 6 month fixed term deposit, by 12,5 basis points for a 9 month fixed term deposit and 15 basis points for a 12 month fixed term deposit.
      • the accrued interest of the fixed term deposit is paid on a quarterly basis into a current/sight account at the Bank of Cyprus and is subject to the provisions of any other Decree issued by virtue of the Law
    • It is prohibited to terminate a fixed term deposit created by virtue of the present Decree, prior to its maturity, unless the funds are used to repay a loan and/or overdraft and/or credit card within Bank of Cyprus, provided that the said credit facility was granted prior to the entry into force of the Enforcement of Temporary Restrictive Measures on Transactions in Case of Emergency First Decree, of 2013:
      Provided that the remaining amount of the fixed term deposit remains for the remaining maturity period under the same conditions:
      Provided further that in the case of repayment of an overdraft and/or credit card:
      • The maximum repayment amount, cannot be higher than the outstanding balance of the overdraft and/or credit card during the entry into force of the present Decree, and
      • the relevant termination of a fixed term deposit is permitted only once during or after the entry into force of the present Decree:
        Provided still further that in the case where part of the overdraft limit or the whole limit of the overdraft is repaid, then the part of the overdraft limit or the limit of the overdraft which is repaid shall be cancelled.
    • It is permitted to terminate a fixed term deposit created by virtue of the present Decree, prior to its maturity, so as to create one or more fixed term deposits the total amount of which is equal to the initial fixed term deposit and for a term equal to the remaining maturity period of the terminated fixed term deposit and under the same terms:
      Provided that new beneficiaries can be added or deleted on the new fixed term deposit;
      Provided further that upon termination of a fixed term deposit the accrued interest of the terminated fixed term deposit is paid into a current/sight account at the Bank of Cyprus and is subject to the provisions of any other Decree issued by virtue of the Law.
  • This Decree enters into force at 16:55 on the day of its publication in the Official Gazette of the Republic.

30th July, 2013

Source: Ministry of Finance:The Enforcement of Temporary Restrictive Measures on Transactions of Bank of Cyprus Public Co Ltd. Decree, of 2013

 Official Announcement:

 http://www.mof.gov.cy/mof/mof.nsf/index_en/index_en?OpenDocument

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