All of the around 15,000 depositors of Laiki Bank in the UK will have their money fully protected, regardless of the 100,000 euro guarantee limit, according to the Bank of England’s Prudential Regulation Authority (PRA).

The new regulatory body of the UK’s financial system (replacing the Financial Service Authority from today) announced that all those whose accounts are in credit will be automatically moved to Bank of Cyprus in the UK, escaping any levy imposed in Cyprus.

Bank of Cyprus UK, unlike the Laiki in the country, is functioning as a fully UK incorporated subsidiary, regulated by the PRA, which means that up to £85,000 of any deposit is protected by the UK compensation scheme.

An estimated £270 million of Laiki UK deposits will be transferred. About 5% of these customers have more than £85,000, according to Bank of Cyprus UK.

The Chancellor George Osborne had revealed last week that the PRA was working towards a “British solution” to the Laiki UK deposits issue.

UK customers of the Laiki Bank whose accounts are overdrawn will not be allowed to transfer their money to Bank of Cyprus UK. Their accounts will be frozen, according to the PRA. Those with mortgages or loans from Laiki Bank will see them transferred to Bank of Cyprus, not in the UK, but in Cyprus itself.

With the exception of the above customer advances and customer deposits, no assets, liabilities, premises, staff or other obligations of the Laiki UK branch have been transferred to Bank of Cyprus Public Company Limited or Bank of Cyprus UK Limited.

Regarding the branch operations of Bank of Cyprus in Romania, they have been suspended by the Central Bank of Cyprus for one week starting 1 April 2013. The aim of this suspension is to explore the possibility of reorganising the operations through a sale, according to the announcement.

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