New Central Bank Governor Constantinos Herodotou has already called on Cypriot banks to invest in technology and staff training to speed up due diligence checks on lawful transactions for anti-money laundering because the island loses substantial capital from long delays.
Yet, nothing has really changed since the Cyprus banking system seems to have gone to the other extreme as far as strictness is concerned, competent authorities told INSIDER.
Addressing an event organised by the Cyprus Chamber of Commerce and Industry back in May, Herodotou pointed out that there are many examples where businessmen opt to carry out their lawful transactions in other countries due to delays in the Cyprus banking system.
And that Cypriot banks take more time to carry out due diligence checks compared with their EU peers, although AML directives are the same for all member states.
Over the last couple of months, a significant exodus of capital from Cyprus was recorded with the most distinct indication being the considerable shrinking of deposits of foreigners from third countries, according to Central Bank of Cyprus data.
Cyprus Bar Association President, Doros Ioannides, stressed that absolutely no progress has been recorded and that huge problems continue to prevail as a result of excessive demands made by banks.
Cyprus has gone on the other extreme and it is the job of the Central Bank and its new Governor to solve this problem, Ioannides also said.
Cyprus Fiduciary Association General Manager Christoforos Ioannou fully agreed with Ioannides and went a step further asking whether these delays will become even loner in the future. Because, he added, banks seem to go for zero-risk transactions only and the consequence is that legal capital is also lost along the way.