Finance Minister Makis Keravnos announced that the beneficiaries for 2025 include individuals whose deposits and securities experienced an infamous ‘haircut’ due to stabilization measures during the crisis, particularly involving the Bank of Cyprus and Laiki Bank.
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Who Benefits?
The reimbursement scheme allows partial compensation for the impacted individuals, with a maximum uninsured amount of €1,000,000 considered per impairment category. Additionally, the total cumulative reimbursement per person caps at €100,000. The initiative is poised to provide relief to approximately 13,000 people.
The net loss replacement will have a 10% rate for deposits lost at Laiki Bank and different rates for the bonds and deposits at the Bank of Cyprus—a 3.61% rate to be precise.
Path to Compensation
Eligible applicants will need to complete an online application process in June to confirm their entitled compensation amounts. The 2013 fiscal turmoil led larger depositors to shoulder the recapitalization of the Bank of Cyprus, with significant portions of uninsured deposits being converted into shares or wiped out entirely.
While the total verified losses for depositors and bondholders stood at €2 billion back then, this new scheme signifies a critical step towards repairing historical financial disruptions in the country.
