Cyprus exempts international clients of another 8 foreign banks from capital controls

NICOSIA, Cyprus – Cyprus on Friday got rid of limits on money transfers and withdrawals for international clients of another eight foreign banks doing business in the debt-laden country.

The Finance Ministry said in a new decree the capital control exemptions now apply to Lebanon’s Banque Bemo, BBAC, Credit Libanais and Bank of Beirut, France-based Banque SBA, Britain’s Barclays, Jordan’s Ahli Bank and the Ukraine’s Privatbank.

This raises the number of exempted foreign banks to 12, although limits, such as a 300 euro ($385) daily withdrawal cap, still apply to domestic clients. Last week, Cypriot authorities lifted transaction limits for the Cyprus branches of Lebanon’s BLOM Bank, the Lebanese and Gulf Bank, Russia’s OJSC Promsvyazbank and Russian Commercial Bank.

Cyprus enacted the controls in March to prevent a bank run after a 23 billion euro ($30 billion) bailout it agreed with its eurozone partners and the IMF forced large depositors in the country’s two biggest banks to take major losses on their savings.

Although restrictions have been substantially eased over the last couple of months, Cyprus officials say they will not rush to eliminate all capital controls and allow unfettered transactions until full trust is restored in the country’s still shaky banking system.

However, Cypriot authorities further loosened domestic bank transactions limits Friday. The limit on cashless payments or money transfers is now raised from 10,000 to 15,000 euros per person per month. The same limit on businesses is increased from 50,000 to 75,000 euros per company per month.

Also, fixed term deposits can be terminated before they mature if the customer uses the money to repay a loan, overdraft or credit card dues owed to the same bank.