The legislation – which is not retroactive – harmonises with the European Union’s Bank Recovery and Resolution Directive (BRRD).

The bills exempt provident funds from bank bail-ins. This applies to insured deposits – up to €100,000 – per account in a provident fund.

Covered by the legislation are small and medium sized businesses, defined as businesses with up to 250 employees, a turnover of up to €50 million or an annual budget of €43 million.

According to MPs, this accounts for 99% of provident funds. The remaining 1% concerns provident funds of large organisations, such as the Cyprus Telecommunications Authority.

Where a financial institution is placed under resolution, and a bail-is imposed on creditors, the cash raised will come in this order: shareholders, bondholders, uninsured depositors.

The bills passed by 31 votes for and 20 against. AKEL and the Greens voted against.

The House also approved the accompanying government regulations.

Source: Cyprus Mail