http://www.bbc.co.uk/news/world-europe-21992745
For years Cypriot banks have attracted Russian investors with competitive rates
The Russian government says it will not compensate Russian savers who have lost money in the Cyprus banking crisis.
Russians are believed to have billions of euros in Cypriot
accounts and deposits above 100,000 euros (£84,300; $128,200) in the two
biggest banks could be reduced by as much as 60%.
Such losses would be "a great shame", First Deputy PM Igor
Shuvalov said, "but the Russian government won't take any action in that
situation".
Cyprus now restricts cash withdrawals.
A 10bn-euro bailout from the EU and IMF - required to keep
the debt-laden Cypriot economy afloat - will only be granted if Cyprus
itself raises 5.8bn euros, most of which looks likely to come from
depositors with more than 100,000 euros in Bank of Cyprus and Laiki
(Popular Bank).
'Haircut' for depositors
Laiki, the second largest bank, is being wound up and folded into Bank of Cyprus, the biggest bank.
Speaking on the Russian state TV channel Rossiya 1, Mr
Shuvalov said Russian money in Cyprus included some that had been taxed
and some that had not.
He said the Russian government would still look at cases
where there were "serious losses, involving companies in which the
Russian state is a shareholder". That review would take place in Russia,
and "for this it would certainly not be necessary to help the Republic
of Cyprus", he said.
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Cyprus capital controls
- Daily withdrawals limited to 300 euros
- Cashing of cheques banned
- Those travelling abroad can take no more than 1,000 euros out of the country
- Payments and/or transfers outside Cyprus via debit and or credit cards permitted up to 5,000 euros per month
- Businesses able to carry out transactions up to 5,000 euros per day
- Special committee to review commercial transactions between
5,000 and 200,000 euros and approve all those over 200,000 euros on a
case-by-case basis
- No termination of fixed-term deposit accounts before maturity
Many of the large-scale foreign
investors in Cyprus are Russian - and in many cases they have taken
advantage of the island's status as an offshore tax haven. Some
politicians have accused Cyprus of acting as a hub for Russian
money-laundering - an allegation rejected by Cypriot officials.
After years of large-scale capital flight from Russia there
is now a Kremlin drive to repatriate Russian money. The government has
introduced tighter monitoring of foreign bank accounts held by Russian
state employees.
Bank of Cyprus depositors with more than 100,000 euros could
lose up to 60% of their savings as part of the bailout, officials say.
The central bank says 37.5% of holdings over 100,000 euros will become shares.
Up to 22.5% will go into a fund attracting no interest and may be subject to further write-offs.
The other 40% will attract interest - but this will not be paid unless the bank performs well.
The fear is that once the unprecedented capital controls -
which are in place for an indefinite time - are lifted, the wealthiest
will rush to move their deposits abroad, the BBC's Mark Lowen reports
from Nicosia.
Cyprus has become the first eurozone member country to bring
in capital controls to prevent a torrent of money leaving the island and
credit institutions collapsing.
Cypriot President Nicos Anastasiades has said the financial situation has been "contained" following the deal.
He has also stressed that Cyprus has no intention of leaving
the euro, stressing that "in no way will we experiment with the future
of our country".
