The reimbursement process for losses incurred during the 2013 bank haircut is set to resume, as confirmed by President Nikos Christodoulides. The government will soon reactivate the platform where impacted depositors can apply for compensation, addressing concerns that no new funding would be available this year.
Clarifying Misunderstandings on Funding
During a recent press conference, President Christodoulides responded to reports claiming that depositors had been informed there was no new funding. He clarified that this was due to a misunderstanding, stating, “Right now the platform will open, so that all those who missed the deadline can file an application.” This clarification aims to alleviate concerns among affected individuals regarding their eligibility for reimbursements.
Details of the Reimbursement Scheme
The reimbursement scheme, described by the government as a ‘partial replenishment scheme,’ allows depositors to reclaim some of their losses from the 2013 bank bail-in. This event saw large depositors contributing to the recapitalisation of the Bank of Cyprus, which was significantly affected by the financial crisis associated with Greece.
Depositors can expect to receive notifications via email, prompting them to log into the service using CY Login (formerly known as Ariadne) to verify their impairment amounts and supply their bank details for payment processing.
Funding and Payout Limits
Funding for these reimbursements is sourced from the national solidarity fund, with a specific budget allocated for payouts in 2026. A new scheme is also anticipated to launch in 2027. The maximum payout for individuals is capped at €100,000; however, different limits apply depending on the bank involved. For instance:
- Savers with legacy Laiki Bank can claim up to €100,000.
- Savers with Bank of Cyprus can claim up to €13,032.
- Bondholders with Laiki can also claim up to €100,000.
- Bondholders with Bank of Cyprus have a claim limit of €99,760.
Historical Context of the Bank Haircut
The 2013 bank haircut was part of a broader bailout programme between Cyprus and international lenders, which aimed to stabilise the country’s financial sector. As part of this programme, uninsured deposits in Laiki Bank were entirely wiped out, leading to the bank’s eventual winding down and integration into Bank of Cyprus. This resulted in significant losses for many depositors, particularly those who were not protected by deposit insurance schemes.
Government Commitment to Affected Deposit Holders
President Christodoulides reiterated the government’s commitment to addressing these losses, stating, “This is something we promised before the elections, and we’re delivering.” This commitment aims to reassure depositors that the government is taking steps to rectify the financial harm caused by the bank haircut.
Next Steps for Affected Depositors
With the reopening of the application platform imminent, depositors who were previously unable to apply due to missing deadlines now have a renewed opportunity. It is essential for these individuals to monitor their emails for notifications and take timely action to submit their applications once the platform is reactivated.
The process aims to provide some relief to those who suffered during the financial crisis, enabling them to recover a portion of their lost savings. As the government prepares to roll out the new scheme in 2027, many are hopeful for a more comprehensive resolution to their financial hardships.
