Banks to open with £255 cash curb

EurosBanks in Cyprus are set to open for the first time in more than a week - with tough restrictions to prevent people from draining their accounts.

Cash withdrawals will be limited to 300 euros (£255) per person each day. No cheques will be cashed, although people will be able to deposit them in their accounts, according to a ministerial decree released last night.

The banks will be open for six hours from noon (10am GMT) and the controls will be in place for four days.

Cyprus's banks were closed on March 16 as politicians scrambled to come up with a plan to raise 5.8 billion euros (£4.9 billion) so the country would qualify for 10 billion euros (£8.5bn) in much-need bailout loans for its collapsed banking sector.

The deal was finally reached in Brussels early on Monday, and imposes severe losses on deposits of over 100,000 euros (£85,000) in the country's two largest banks, Laiki and Bank of Cyprus.

Since Monday's deal, authorities have been rushing to introduce measures to prevent a rush of euros out of the country's banks when they do reopen.

Other capital controls include a cap of 5,000 euros (£4,200) on transactions with other countries, provided the customer presents supporting documents. Payments above that amount will need special approval.

Travellers leaving the country will not be able to take with them anything over 1,000 euros (£845) in cash - as well as the equivalent sum in foreign currency.

Tuition fees and living expenses of up to 5,000 euros for three months will be permitted for overseas students, but documentation must be provided proving the student's relationship to the dispatcher. Investors will also not be able to terminate fixed-term deposit accounts before they mature unless the funds are to be used for the repayment of a loan in the same bank, the decree says.

In the capital Nicosia, armed police officers guarded several trucks carrying containers arriving at the country's Central Bank, while a helicopter hovered overhead. The contents of the trucks could not be independently confirmed, although state-run television said they were carrying cash flown in from Frankfurt for the bank reopening.

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