Cyprus banks to reopen on Thursday after bailout closure

Cypriots have been flocking to food charities as banks remain closed

Banks in Cyprus are to reopen on Thursday at 10:00 GMT, 10 days after they closed to prevent a bank run as a controversial bailout was negotiated.

Banks will open their doors between noon and 18:00 local time (10:00-16:00 GMT), the Cypriot central bank said.

Customers will also be limited to withdrawing 300 euros ($383; £253) a day, to prevent everyone fleeing with their savings.

Earlier, the boss of the Bank of Cyprus was sacked.

"I am telling you that all banks are definitely going to open tomorrow," the Cypriot central bank's Aliki Stylianou said.

It follows several false announcements of when bank customers would be able to access their funds.

Capital controls are to be imposed as Cyprus seeks to raise 5.8bn euros to qualify for a 10bn-euro bailout from the European Union, European Central Bank and the International Monetary Fund, the so-called troika.

Cyprus Finance Minister Michalis Sarris announced a long-awaited series of capital controls. These include the 300-euro daily withdrawal limit, and a ban on cashing cheques.

Mr Sarris cited the "lack of substantial liquidity and significant risk of deposits outflow, with possible outcome the collapse of the credit institutions" as the reasons for the restrictions.

40% losses

Depositors in Cypriot banks with more than 100,000 euros could see 40% of their funds converted into bank shares, while those with less than 100,000 euros will not lose any funds - but face limits on what funds they can access.

Speaking to the Financial Times, Mr Sarris said that the controls would be reviewed after seven days, and that some banks could be exempted altogether.

Other controls will prohibit people from taking more than 1,000 euros in cash outside the island, with customs officers authorised to make checks at border crossings.

Money transfers outside Cyprus are prohibited, with a few very specific exceptions, and there is a limit of 5,000 euros a month in credit or debit card purchases while abroad.

The new measures mean that Cyprus is the first eurozone nation to impose capital controls - the absence of which is a fundamental reason behind the monetary union of the 17 members of the euro bloc - since the debt crisis began.

Concern about the ongoing situation in Cyprus has continued to weigh on the Athens stock market, with Greek shares ending down 4% on Wednesday.

Bank merger

Bank of Cyprus chief executive Yiannis Kypri confirmed he had been removed as head of the bank, which is the country's largest commercial lender.

He said that he was forced to quit "upon demands of the troika", which comes after an administrator had been appointed to Bank of Cyprus to restructure the bank. It is being merged with the "good" parts of the failed Laiki Bank, which will be closed down.

But a European Commission spokesman denied that the troika had demanded Mr Kypri's removal.

The BBC's Paul Mason: "Every figure in this document has the word 'euro' and two x's"

Bank of Cyprus chairman Andreas Artemis handed in his resignation on Tuesday, along with four other directors, but the bank's board rejected the resignations.

Panicos Demetriades, the central bank governor, then sacked the entire board, according to the Cyprus News Agency.

Demonstrations

Mr Demetriades was widely criticised on Tuesday for suggesting that Bank of Cyprus was going to be wound up in the same way as is planned for Laiki Bank.

His comments led to demonstrations, calls for his resignation from Bank of Cyprus staff, and a hastily-drafted denial from Finance Minister Michalis Sarris.

Mr Demetriades said "superhuman" efforts were being made to get the banks ready for reopening on Thursday.

"Indications are that banks will open tomorrow with some restrictions on capital," said central bank spokeswoman Aliki Sylianou, speaking to the country's state broadcaster on Wednesday.

The banks have been shut since 15 March while the controversial 10bn-euro bailout was being negotiated.

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