(MENAFN- Kuwait News Agency (KUNA)) Around 15,000 savers in the UK arm of stricken Cypriot bank Laiki will see their deposits protected under British rules and will escape the Cyprus banking levy, it was announced Tuesday.
The Prudential Regulation Authority (PRA), the Bank of England's new banking and business watchdog, said in a statement around 270 million pounds in deposits from Laiki Bank UK had been transferred to Bank of Cyprus UK and would come under the UK compensation scheme, guaranteeing up to 85,000 pounds per saver.
Customers, including those with current accounts in credit, will not be hit by any Cypriot levy on their accounts - potentially as high as 60% for large depositors - after the transfer and will be able to access their accounts as normal.
However, customers with overdrafts will remain at Laiki, also known as Cyprus Popular Bank, and will see their accounts frozen.
The PRA, which officially came into effect yesterday under a regulation overhaul, has been working on plans for a resolution to protect UK branch customers of Laiki after Cypriot authorities announced it would shut and merge with Bank of Cyprus.
It is feared that depositors in Cyprus will be forced to accept losses of up to 60% under the European rescue package to save the country from bankruptcy.
Deposits of more than 100,000 euro (85,000 pounds) at the Bank of Cyprus will lose 37.5% under a bank levy being imposed across the country, but a second raid on these accounts could see depositors lose up to 22.5% more to prop up the bank's reserves. Â
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