Earlier this week the Central Bank of Cyprus (CBC) triggered the Deposit Guarantee and Resolution of Credit and Other Institutions Scheme (DGS) for deposits of less than €100,000, allowing it to make payments to around 6,000 depositors.
The total amount due is estimated not to exceed €130 million, while around 4,500 of these have less than €20,000 in their accounts. However, possibly as a result of the bad publicity surrounding the bank, there has not been a flood of applications.
“We expected more interest from depositors,” a person familiar with the matter told The Cyprus Weekly.
For deposits in excess of €100,000, said to be over €1 billion, legal proceedings are under way to appoint a Special Paymaster for the liquidation of assets estimated at €1.2 billion.
FBME was placed under resolution in July 2014 following a report of the US Treasury Department’s Financial Crimes Enforcement Network (FinCen) naming the lender as a “financial institution of primary money-laundering concern”.
FBME Cyprus staff have been on strike, accusing the CBC and the Special Administrator of giving the Bank’s depositors false information and unlawful termination of contracts.
FBME’s lawyer Alecos Markides called the saga “a classic case of arbitrary use of power”.
This week the CBC hit back at FBME, saying that litigation initiated by the bank’s owners was behind delays in the process.
FBME shareholders filed a case against the Republic of Cyprus in the International Chamber of Commerce (ICC) demanding €1.2 billion in damages.
“The CBC had to step in … the owners know very well that in all cases in the past where FinCen came out with such a report, the financial institution was either closed down or sold,” The Cyprus Weekly was told.