Cyprus Banks will now have to pay a levy on all deposits they hold at the end of each financial year. The levy will be calculated on all deposits, other than interbank and deposits from financial institutions. This special bank levy will be at the rate of 0.095%.
This measure is projected to raise an annual revenue of 120 million Euro to be used for the establishment of a Financial Stability Fund to save for any future exposure of the banks to global crisis effects.
The Banking sector in Cyprus, being relatively large, due to the characteristic of Cyprus as a financial centre for so many years, is a cause for concern, to some of the US based rating agencies and the measure seems to be a prompt reply to such concerns raised recently.