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During the Cypriot financial crisis, it seems that a "bank holiday" was announced on March 16 and lasted until March 26, during which time ATM withdrawals were impossible or at least tightly restricted.

I'd like to understand, however, if other types of transactions also were blocked during that time, such as bank-to-bank transactions, and bank-to-utility transactions.

For example, consider a hypothetical Cypriot who had a Bank of Cyprus account and the following payments due on March 20, 2013:

  • A payment on a loan issued by another Cypriot bank
  • A payment on a loan issued by an EU bank
  • A payment on a credit card
  • A payment to the local utility (electricity, etc.; not sure if these are nationalized in Cyprus or not)

Could these bills have been paid from the Bank of Cyprus account directly? Or would they have all gone unpaid without some other type of intervention (such as individuals physically going to the utility company and paying with cash, or the government mandating that due dates be extended)?

If any of the above could have been paid from the bank on March 20, could unscheduled payments have also been made, to reduce one's account balance and thus one's exposure to the subsequent monetary loss?

  • 2
    Fascinating question; have you done preliminary research? – Mark C. Wallace Jan 15 '18 at 20:11
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    @MarkC.Wallace I've done some googling, but details elude me. I haven't had much success cutting through the "it'll happen in your country next!" type articles to actually find out what happened. – Nathaniel Jan 15 '18 at 20:21
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I have a business relation in Greece, and a Dutch bank account. Both countries use the Euro. Theoretically the Greek company can transfer the money from Greece to my Dutch account. In reality they can't. For each transaction out of the country they need to apply for a license from the Greek national Bank. For transfers in Greece they don't need approval.

I'm pretty certain this worked more or less the same in Cyprus.

A payment on a loan issued by another Cypriot bank

Not sure. Its very well possible to empty your bank account that way.

A payment on a loan issued by an EU bank

No, that was not allowed.

A payment on a credit card

Yes, as long as it was transferred within Cyprus to a Cypriot account.

A payment to the local utility (electricity, etc.; not sure if these are nationalized in Cyprus or not)

Yes, they could do that.

What they could not do was empty their bank accounts by using ATM machines. The same restrictions applied to bank transfers. That's why nobody was informed until the banks were closed for the weekend. Even if they wanted to, they couldn't transfer anything because the banks were closed. And they wouldn't be open on Monday, due to the bank holiday.

  • Thanks! So it sounds like "bank holiday" doesn't mean a complete inability to make any transactions involving the bank. Some "internal" transfers could still go through during the "holiday." – Nathaniel Apr 26 at 15:39
  • Yes, that's pretty accurate. In the past this was very easy to achieve, by declaring a bank holiday. Now, with digital banking it's a lot more complicated. Do mind that all digital transactions were also on hold. Paying your utility bills (just in time) wouldn't matter - it's a bank holiday. – Jos Apr 27 at 3:39

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