(MENAFN - AFP) Cyprus' troubled banking system may need as much as 10 billion euros in EU bailout funds to recapitalise, a figure in line with expectations, the central bank chief said on Friday.
Panicos Demetriades said that, based on data given by international creditors included in a preliminary agreement with the government, the amount comes up to 10 billion euros.
"No one knows with certainty what the figure is. A number was included in the memorandum of understanding and we can say that amount is up to 10 billion," Demetriades told reporters.
"Personally I estimate that the amount to recapitalise the banks maybe lower than 10 billion euros," he added.
The governor said the clock was ticking and the quicker the banks received EU aid the better.
"Actions to consolidate the banking sector need to be taken urgently... Otherwise the situation that exists today will lead to even more serious problems."
The European Commission, European Central Bank and International Monetary Fund say good progress has been made but that some adjustments are needed.
The level and final terms of a bailout deal depend on how much the Greek-exposed banking sector actually needs to improve liquidity.
An independent due-diligence exercise is being carried out by Pimco, which is expected to report in early December.
The finance ministry says a bailout deal could be agreed by eurozone ministers in mid-December with a first tranche of fund to support the banks expected by February.
Cyprus requested a bailout in June when its two largest Greek-exposed banks asked for assistance after failing to meet EU capital buffer criteria.
The state then nationalised the island's second bank, Cyprus Popular Bank, after underwriting its 1.8 billion euro capital issue.
The money needed by Cyprus has been widely reported to total 17.5 billion euros -- 10 billion euros for the banks, 6 billion for maturing state debt and 1.5 billion for public finances.
Finance Minister Vassos Shiarly said it would be around 17 billion euros, assuming that the due-diligence on banks came out at 10 billion.