Thousands of people have attended a concert in Cyprus in a bid to help those struggling as a result of the country's financial crisis.Read the full story ›
Bank of Cyprus savers with over 100,000 euros could take losses of up to 60 percent, an official from the bank told the Associated Press.
The Central Bank of Cyprus has eased some of the restrictions imposed on customers.
The bank will now allow debit and credit cards to be used normally for domestic payments, although curbs on card purchases abroad are still in place.
The central bank said it would review the limits on a daily basis.
It appears that some internet banking systems in Cyprus have been restored. This screen shot posted online of one account with Laiki bank shows that over €700,000 of the total account balance has been 'blocked'.
Savers with the Bank of Cyprus could be given shares in the bank, a source close to the negotiations has told the news agency Reuters.
Under the current proposals depositors with more than €100,000 in the bank would:
- Be given shares in the bank worth 37.5% of their original deposit, the bank would use this money to improve its financial position.
- Approximately 22.5% of the remainder of their saving would earn no interest.
- The remaining 40% would continue to earn interest but it would only be paid if the bank started performing well.
- Therefore if the bank continued to perform badly, 62.5% of the savers original deposits would not be earning any interest.
Reuters reports that depositors would have no guarantee that any of money over the 37.5% of shares offered, would actually be paid back to savers if the bank collapsed.
Cyprus has no intention of leaving the European single currency, the island's president said today, assuring Cypriots that the situation was "contained" in the wake of a tough bailout deal with the European Union. He told a conference in Nicosia:
We have no intention of leaving the euro. In no way will we experiment with the future of our country.
The banks have now closed after just six hours of trading and the Cypriot president today praised his people for their maturity and collectedness, in the face of everything they have faced over the past weeks.
However the patience of this very patient nation is likely to be tested in the days ahead. The restrictions that have been put in place were supposed to only be there for seven days - we now understand they will stay in place for at least a month.
That is going to have a very serious affect on the economy and the people trying to make a living within it.
Laiki bank worker Stelios Koukos has tweeted his relief after a busy first day back at work after Cyprus banks reopened today:
Just got home from work! A big thank you to Laiki's customers for their humane attitude and their understanding! At least those I've served!
Laiki is the bank in the worst state in Cyprus.
Cyprus expects to fully lift the regime of financial restrictions on its banks in "about a month," Cypriot Foreign Minister Ioannis Kasoulides said.
"A number of restrictions will be lifted and gradually, probably over a period of about a month according to the estimates of the central bank, the restrictions will be fully lifted," Kasoulides told reporters.
Cyprus president Nicos Anstasiades has taken a 25 percent pay cut as the country's financial woes continue. Restrictions on cash withdrawals are also expected to continue for some time.
Europe Correspondent Emma Murphy reports: