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Bank of Cyprus depositors to lose up to 60 percent

  • Bank of Cyprus depositors with more than $128,200 stand to lose up to 60 percent of their savings as part of a $13 billion bailout offered by the European Union, the European Central Bank and the International Monetary Fund.

    On Saturday, the central bank said 37.5 percent of holdings over the aforementioned amount would be converted into shares.

    Meanwhile, up to 22.5 percent will go into a fund with no interest and could be subject to future write-offs.

    The rest of the amount will attract interest but will not be paid unless the bank performs well.

    Large depositors at Laiki, the country's second largest bank, could be hit with an even tougher "haircut", according to Cypriot officials. However, no further details were divulged.

    Cyprus needs to raise $7.5 billion to qualify for the bailout package.

    It is the first county in the eurozone to introduce capital controls in a bid to prevent money from leaving the Mediterranean island nation and avert a collapse of its banking sector.

    Know more about the Cyprus economic conditions through Economy of Cyprus