Banks in Cyprus have opened their doors for the first time in almost two weeks, with tight controls on transactions to prevent a run on deposits after the island was forced to accept a stringent EU rescue package to avert bankruptcy.
In central Nicosia on Thursday, queues of at least a dozen people had formed outside branches of the country’s two biggest lenders, Bank of Cyprus and Cyprus Popular Bank, also known as Laiki.
Finance Minister Michalis Sarris had earlier imposed temporary limits on daily withdrawals to $385 to prevent a run on the banks that could wreak havoc on the island’s already fragile economy.
He also banned the cashing of cheques and ordered those travelling abroad not to take more than 1,000 euros out of the country.
Al Jazeera’s Simon McGregor-Wood, reporting from Nicosia, said the government is “reassuring people that this is a temporary measure, that they will lift it as soon as possible”.
“These capital controls fly in the face of the rules and regulations that set up the Eurozone. The Eurozone is not meant to have these types of controls,” he said.
“The government says they are essential to prevent a run on the banks and a catastrophic rush to drain the system of all the money.”
Hundreds of demonstrators marched from the European Union’s offices in the capital to Parliament on Wednesday night to protest the bailout plan.
No checks will be cashed, although people will be able to deposit them in their accounts, according to a ministerial decree that was released late Wednesday.
Other capital controls include a cap of 5,000 euros on transactions with other countries, provided the customer presents supporting documents. Payments above that amount will need special approval.
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.
Also 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 said.