The Central Bank of Cyprus has decided to temporary suspend the blacklisting of issuers of bounced cheques due to the extraordinary situation prevailing in Cyprus’ banking sector following the bailout deal and the restrictions imposed on bank transactions.

The measure applies to persons who have issued dishonoured cheques during the last weeks and it will continue until the normalization of the current situation of Cyprus’ banking sector.

Cyprus Central Bank’s Spokesperson Aliki Stylianou told CNA that the CB gave instruction for the suspension of the Central Information Register for Issuers of Dishonoured Cheques.

“The Cyprus Central Bank, in order to help people in this difficult economic period, is to give today instructions the operation of Central Information Register (CIR) to be suspended”, she said, explaining that this means that nobody who issued dishonoured cheque lately will be recorded in the Registry.

This, she said, will be the case until the normalization of the situation with the Cypriot Banks.

According to the Join Instructions of the Central Bank for the Central Information Register for Issuers of Dishonoured Cheques, a person or legal person shall be recorded in the Registry if it has, over a period of 12 months, issued at least three dishonoured cheques irrespective of the value of the cheques, or  the combined total value of any dishonoured cheque or cheques issued over this period exceeds €2.000.

Excluded from international markets, Cyprus applied in June 2012 for financial assistance, after its two largest banks sought state aid, following massive write downs of their Greek bond holdings amounting to €4.5 billion or 25% of the island`s GDP, as a result of the Greek sovereign debt haircut.

The government concluded a deal with the Troika of international lenders, which needs to be ratified by national parliaments and the Eurogroup. The Eurogroup reached an agreement with the Cypriot authorities on the key elements necessary for the macroeconomic adjustment programme.

The island’s second largest bank, Cyprus Popular Bank (Laiki), splits into a “good” and a “bad” bank. The bank`s “good” assets are being transferred to the Bank of Cyprus, where a massive haircut is being imposed on uninsured deposits of more than €100,000.

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