Cypriot banks remain closed as fears of depositor panic grow

Banks across Cyprus remain firmly padlocked after financial authorities extended the country’s blanket closure, fearing worried depositors will rush to drain their accounts.

By The Newsroom

Published 26th Mar 2013, 18:50 BST

The shut-down is hammering businesses, which have been without access to their funds for more than a week.

All but the country’s two largest lenders had been due to reopen today, after being shut while politicians worked out how to raise the funds necessary for Cyprus to qualify for an international bailout. Under the deal for a 10bn euro (£8.5bn) rescue clinched in Brussels, Cyprus agreed to slash its banking sector and inflict hefty losses on large depositors in troubled banks. After initially saying most financial institutions would reopen the country’s Central Bank made a surprise reversal just before midnight, announcing all banks would remain closed until Thursday.

ATMs have been operating throughout the closure, but many have quickly run out of money. A daily withdrawal limit of 100 euros has been imposed by the two largest lenders, Bank of Cyprus and Laiki.