Filenews 5 April 2022 - by Eleftheria Paizanos
The Parliament is running to harmonize with a European directive, as "accidentally" a harmonized provision was removed from the national legislation in relation to the amount of capital that credit institutions (banks) must hold in order to obtain a license to operate. With the reintroduction of the relevant harmonizing provision, when establishing a credit institution, it should have €5 million. as initial chapters.
Yesterday, a bill was discussed in the Parliamentary Committee on Finance which restores the harmonising provision on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.
Speaking in parliament, a representative of the Legal Service said that by mistake of the government and the Parliament (without further clarifications on his part) the harmonizing provision was deleted which must be re-voted. As he said, at the moment there is a harmonizing gap, with the result that the Republic of Cyprus is exposed and at any time the European Commission can initiate an infringement procedure.
On the part of the Ministry of Finance, it was said that the bill reinstates the provision by which the Central Bank (ECB) will be able to refuse to grant permission to start a credit institution if its funds are less than €5 million. An KT spokesman agreed to the bill, which he said corrected a mistake. He suggested that the €5 million they are the minimum funds needed when a bank is set up.
