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State to consult troika on bank staff provident funds

By George Psyllides

THE FINANCE minister has asked for time to consult with international lenders about bank employees’ provident funds, their union said yesterday.

In a meeting with Harris Georgiades on Wednesday, ETYK asked the government to immediately deposit the money – included in bailout — that will cover the provident fund of the employees of the now defunct Laiki Bank.

The union also asked for the release of the provident fund at the Bank of Cyprus (BoC) so that employees taking early retirement can get their money.

To receive a €10 billion bailout from its EU partners, Cyprus had to agree to close its second-biggest bank, Laiki, and recapitalise BoC by seizing a large chunk of uninsured deposits – over €100,000.

So far 37.5 per cent of the deposits have been taken while a further 22.5 per cent remained frozen pending an asset review that will determine the bank’s recapitalisation needs.
The ensuing crisis prompted authorities to enforce strict capital controls had to prevent bank runs.

According to an ETYK circular, the minister showed understanding but asked for at least 10 days to give definitive answers, following contacts with the island’s lenders.

The union is up in arms over an early retirement scheme introduced by BoC.

ETYK said it fell short of their expectations and was doomed to fail.

Cyprus’ bailout deal provided that BoC would absorb certain Laiki assets, and its employees.

As a result it currently operates 202 branches in Cyprus and employs 5,640 employees – 85 branches and 2,390 employees were transferred from Laiki.

On Monday it introduced a voluntary retirement scheme, which aims to cut staff by 1,000 plus.

The scheme will be valid until July 26.

After that, BoC warned, it could be forced to make people redundant with worse terms.

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