Compensation payments of about €44.36 million have been made to 4,524 affected depositors and holders of securities from the 2013 banking crisis, according to government spokesman Konstantinos Letymbiotis. This significant financial step aims to assist those who faced substantial losses during a tumultuous period in Cyprus’s economic history.
During a recent press briefing at the presidential palace, Letymbiotis confirmed that the transfers have already been arranged through the Central Bank of Cyprus. He emphasised that these payments “reflect the government’s resolve to implement cabinet decisions and support citizens who suffered financial losses.”
The compensation initiative specifically targets individuals whose savings and securities were adversely affected during the 2013 bailout. Letymbiotis noted that each case has been thoroughly verified, and those beneficiaries who confirmed their details are now receiving the sums owed. This methodical process illustrates the government’s commitment to a transparent and accountable distribution of funds.
Letymbiotis further encouraged individuals who have yet to submit their information via the online platform to act promptly. The online submission system is crucial for confirming losses and processing additional compensation requests. The finance ministry has set a deadline of September 30 for those who have applied for compensation but have not yet verified their application data, underscoring the urgency of the situation.
The compensation scheme marks a pivotal step in addressing the aftermath of the financial crisis that gripped Cyprus over a decade ago. In March 2013, the island nation secured a €10 billion bailout from the Eurogroup, European Commission, the European Central Bank, and the International Monetary Fund. A critical part of the bailout agreement involved a drastic measure where 47.5 per cent of uninsured deposits exceeding €100,000 in the Bank of Cyprus were converted into shares. Furthermore, all uninsured deposits at Laiki Bank were completely wiped out, leading to the bank’s closure and the transfer of its assets and insured deposits to the Bank of Cyprus.
This controversial action, often referred to as a ‘haircut’ on bank deposits, was implemented to avert a collapse of the financial system. Courts later upheld this decision, declaring it justified in the public interest to prevent a ‘disorderly default’ of the banks and avert a wider economic disaster.
To aid those affected by the crisis, the National Solidarity Fund was established, amassing around €260 million in assets. As of March 2025, this fund had successfully verified 80 per cent of claims submitted through its online platform, which opened in December 2023 and closed in May 2024. However, as discussions around compensation continued, estimates of losses among depositors and bondholders soared to around €2 billion, with about 13,000 beneficiaries identified.
Many individuals expressed dissatisfaction with the compensation terms, particularly the €25,000 cap per person and the 15 per cent compensation rate for losses. Critics labelled these measures as inadequate and unfair, highlighting the ongoing distress felt by many victims of the crisis.
In June 2025, the cabinet took further action by approving a €100 million payout from the Solidarity Fund. This plan included a 3.61 per cent compensation for losses incurred by Bank of Cyprus depositors and 10 per cent for net losses from Laiki Bank. Beneficiaries were invited to confirm their details online, further facilitating the compensation process.
