The House finance committee on Monday discussed a bill that would make companies applying for a bank licence to pay the processing fee.

Under the legislation, the Central Bank would be empowered to demand from legal entities they pay for the fee, which currently amounts to €5,000.

It would apply to entities applying for a bank licence or to operate as a credit-acquiring company.

In parliament, the Central Bank, the attorney-general’s office and the banking association supported the proposal. The Central Bank said it would seek feedback from the European Central Bank.

In a related matter, the committee began reviewing a bill relating to the minimum amount of capital an entity must possess to qualify to operate as a bank.

A rep for the Central Bank said that, under EU law, the seed capital should be at least €5 million.

But according to an official from the attorney-general’s office, when the Cypriot parliament was voting through a relevant law to harmonise with EU legislation, “by mistake, both by the government and parliament, the clause pertaining to the start-up capital of €5 million was erased.”

As such, Cyprus is currently not harmonised with EU law, and could be subject to infringement proceedings initiated by the European Commission.

In other business on the day, MPs started discussing another EU harmonisation bill on checks of liquid assets entering or leaving the European Union, as well as checks of the same entering or leaving Cyprus from/to another EU member-state.

Parliamentarians heard that in the event someone fails to declare cash or cash equivalents, the current law provides for a fine of up to €50,000.

Under the bill being examined, the penalty would rise to up to €100,000 or a three-year prison sentence, or both.

Additionally, the cash could be held and be liable for confiscation.

Officials spoke of cases where owners of the cash were unable to prove the money was legally acquired, and cited one instance where it was established that €500,000 were ill-gotten gains from drug trafficking.