Saturday, March 16, 2013

Businesses and Public begin withdrawing their funds from Cyprus Banks to send abroad

Businesses and Public begin withdrawing their funds from Cyprus Banks to send abroad

The lines are getting longer to withdraw money from Cyprus banks.    

Depositors in Cyprus banks are threatening to withdraw their savings and other types of deposits from the island after the Eurogroup and government imposed a one-off bank tax of 9.9 percent on deposits over 100,000 euros - and 6.75 percent on deposits under 100,000 euros.

"From Tuesday I will be moving all my savings to another country to avoid a repeat of this criminal behaviour," said one depositor via Facebook.

What if it happens again, asks another saver - does this set a precedent?

The bank tax was announced over the long weekend and accounts have been frozen. Monday is a holiday, and the cash will be subtracted from all accounts as of Tuesday, March 19th. The money will be exchanged for Laiki bank shares.

On a larger scale, there are reports that companies with their bank accounts in Cyprus will leave the island or change their banking practices after the money is removed.

All the signs point to a massive loss of trust in the government and banking system, with many pointing the finger of blame at the Eurogroup.

The deposit grab has left the entire island stunned and confused as people worry about their savings. Even those who have received loan funds that have not been used yet will be taxed, leaving them short of money for whatever purpose the loan has been taken.

All deposits will be taxed, including those of foreigners, locals, companies with current accounts, and savings accounts.

The overwhelming feeling is that this is a huge injustice against individuals and companies who received no warning of the tax and have no choice but to pay it. Those with internet banking are receiving the message that the bank has temporary technical problems and 'sorry for the inconvenience'.

Other questions are being raised about the government's credibility, after it promised not to allow a tax on deposits, and then made a u-turn of epic proportions - followed with a conveniently lined-up system to freeze accounts over the weekend.

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