International banks operating in Cyprus could contribute greatly to the recovery of the island’s economy, the chairman of their association said, as he urged the government to lift the remaining capital controls to allow them to realize their full potential.
“International banks have significant reserves in terms of capital and liquidity, and are ready to extend their lending programmes to Cypriot companies,” association chairman and CEO of RCB Bank Kirill Zimarin said. “Therefore, it’s fair to say that international banks could be among the key drivers behind the recovery and growth of Cyprus’ economy and its banking sector.”
Zimarin, re-elected chairman of the association on Wednesday, said international banks have seen their market share by assets grow from 8.0 per cent to 22 per cent.
“International banks are reaffirming their commitment to develop business in Cyprus and continue promoting Cyprus as an international financial centre,” he said.
However, to fully realize their potential, Cyprus must lift the remaining capital restrictions concerning overseas transactions.
“The facts and the figures show that Cyprus economy is recovering, and is mature enough for capital restrictions to be lifted in full. This would enable international banks to fully realise the potential they have to support Cyprus economy and Cypriot borrowers,” he said.
Cyprus introduced capital controls in April 2013 to prevent a cash flight after a chaotic bailout forced the closure of one bank, and a second bank seized deposits to recapitalise.
It was the first time controls were imposed in the history of the eurozone.
It has since lifted all domestic controls but despite being eased significantly, restrictions remained on international transactions.
Last week, authorities raised the limit on cash transfers abroad to €2.0 million without prior permission required, from €1.0 million.
Individuals would also be able to transfer up to €10,000 out of the country per month, from a previous €5,000 limit. Travellers abroad would also be allowed €6,000 per person, from a previous €3,000 ceiling.
Set up in 2002, the Association of International Banks brings together 25 banks from nine countries, with total assets worth €14 billion.