Cyprus banks are to reopen on Thursday at 12:00 p.m. local time, two weeks after they closed to prevent a bank run as a controversial bailout was negotiated.
Banks will open their doors between 12:00 and 18:00 local time, the Cypriot central bank said.
Customers will also be limited to withdrawing 300 euros ($383) a day, to prevent everyone fleeing with their savings.
“I am telling you that all banks are definitely going to open tomorrow,” the Cypriot central bank’s Aliki Stylianou said, which comes after several false announcements of when bank customers will be able to access their funds.
Capital controls are to be imposed as Cyprus seeks to raise 5.8 billion euros to qualify for a 10 billion-euro bailout from the EU, ECB and the IMF, the so-called troika.
Cyprus Finance Minister Michalis Sarris announced a long-awaited series of capital controls, including the 300-euro daily withdrawal, and no cheques can be cashed.
Michalis 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.
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, Michalis 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 authorized 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 of Cyprus chief executive Yiannis Kypri confirmed he had been removed as head of the bank, which is the country’s largest commercial lender.
Reuters reported that Yiannis Kypri had issued a statement about his removal, which said: “The reason I was given was that, based on the resolution decree recently passed by parliament, and upon demands of the troika, an administrator had been appointed at the Bank.
“Until now I have not received a formal letter from the governor of the Central Bank on the matter.”
A European Commission spokesman denied that the troika had demanded Yiannis Kypri’s removal.
“These reports are not correct and decisions like this would in any case be the responsibility of the Bank of Cyprus,” he said.
An administrator has 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.
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.
Now Panicos Demetriades, the central bank governor, has sacked the entire board, according to the Cyprus News Agency.
Panicos Demetriades was widely criticized 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.
Panicos 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 March 15 while the controversial 10 billion-euro bailout was being negotiated.