Insider Economy Further shrinking of Russian deposits in Cyprus banks 

Further shrinking of Russian deposits in Cyprus banks 

Pressure on Cyprus to reduce Russian money in banks seems to be delivering results, given that between 2012 and end of April 2019 these deposits shrank by €14.65 billion.

The reduced presence of Russian depositors in Cypriot banks seems to be linked to international efforts to combat money laundering activity within the EU.

Russian capital in the island’s banking system was significantly high even after the March 2013 haircut on deposits. However, US pressure on Cyprus intensified as from 2017 and the Central Bank of Cyprus responded by shutting down shell companies.

The supervisory body also called on banks to interview depositors and ask for tax certificates. A lot of them failed to meet criteria and as a result their accounts were closed.

CBC data which was released yesterday clearly shows the continuous drop in Russian funds in Cypriot banks.

As a matter of fact, in only one month – April 2019 compared to March 2019 – Russian deposits withdrawn from the island’s banking system were as high as €67 million.

In the first quarter of 2019, third-country deposit losses reached €133 million. Because Russian clients continuously close their accounts in Cyprus, total deposits fell by €1.06 billion within one year. And, compared to two years ago, deposits fell by €2.7 billion.

Russians, who were the main pillars of Cyprus’ banking system before 2013, appear to be transferring funds to other countries as the battle against black money intensifies. Since 2015, overall deposits of Russians who left Cyprus reached a high of €5.15 billion.

In addition, Russian deposits by end of 2012 stood at €21.51 billion out of a total of €70.15 billion. Deposits of Russians in 2012 were higher that the country’s GDP. Seven years ago, one in three euros in Cypriot banks came from Russians.

By end of April 2019, however, overall deposits in Cypriot banks stood at €47.73 billion with those by Russians reaching €6.87 billion. Today, one in seven euros in the banking system comes from Russians.

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