FBME Cyprus. How to “unlock” your money at the FBME.

The Central Bank of Cyprus has on the 9th of April 2016 activated the Deposit Guarantee and Resolution of Credit and Other Institutions Scheme (DGS) in the case of the Federal Bank of the Middle East (FBME).

The DGS is activated under the provisions of the Deposit Guarantee Schemes Law,  Law 5(I)/2016 (“the Law”) and the Regulations and decisions issued thereunder.

In simple words the activation of the DGS means that depositors of the FMBE (excluding certain classes),  can take their money up to an amount of €100,000 (the Payout)

The rest of depositor’s money are not lost, but it is not clear at the moment when they can be claimed and whether there will be a haircut.

The main question that concerns depositors, of course,  is how will they get their money.

The DGS has set up a procedure which is published in the website of the Central Bank of Cyprus.

In order to assist depositors we find it useful to clarify certain matters.

A depositor must have in mind 3 pre-conditions that exist:

1. The claim of the Payout can only be done by the person that was managing the account at FBME. It cannot be done through a lawyer or other agent. Therefore in the case of a company that has an account at FBME , the authorized person must file the application at the DGS.

2. The claim must be filed in person at the headquarters of the Central Bank. It cannot be filed via a lawyer or other representative.

3. The money can wired in a bank account of the same natural or legal person either in Cyprus or in an EEA credit institution. The countries which belong to the EEA are: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, the UK, Iceland, Liechtenstein and Norway.

Therefore if a company XYZ Ltd has a bank account at FBME Cyprus which is managed by Mr. John Smith then Mr. John Smith must sign the application for the Payment, come to Cyprus and file in person before the DGS, stipulate a bank account of XYZ Ltd either in Cyprus in another bank or in EEA country where the money may be wired.

Our law firm has contacted the DGS and clarified the above issues because certain areas were not clear by the announcement of the DGS and the FAQ published on the Central Bank’s website.

For the link of the Central Bank’s website click here.

Our law firm can assist you with bank account opening in a Cyprus opening and completing your Payout application.

For more information please email us at office@lawyer.com.cy 

FBME Cyprus. How to "unlock" your money at the FBME. by
Christophoros Christophi
About the Author
Christophoros Christophi

Lawyer and Managing Partner of Christophi & Associates LLC, Lecturer (Company Law) at the European University of Nicosia.
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