The Cyprus Deposit Protection Scheme (DPS) is based on EU directive 2014/49/EU and is an external guarantee that covers bank deposits up to 100.000 Euro for customers of commercial banks active in the European Union. Cyprus is part of the European Union and is therefore invited to integrate the directive and procedures as proposed by the European Commission.
In Cyprus, the Deposit Protection Scheme was never activated for a bank that lost its license due to presumed facilitation of money laundering. Although this is an indirect statement, the central bank is allowed to intervene and prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in reckless or fraudulent behavior.
The new situation for the central bank and FBME Bank creates delays. Especially since FBME Bank refutes the allegations and does everything to block the work of the administrator from the central bank. Employees were on strike and the online FBME Ltd. platform questions each and every action of the central bank with unfounded accusations.
For customers of FBME Bank Cyprus the activation of the Deposit Protection Scheme is good news. Finally after almost two years there is hope again. According to the EU directive, members should aim to finalize the indificual claims within a 20 (working) day period. The Cyprus Deposit Protection Scheme directive payout is expected faster, within 7 working days.
Although there have been delays since the inception of the DPS for FBME Bank, the process works well now. FBME is finally helpful, but stays reluctant, in its cooperation. It is therefore recommended that customers of the bank file their claim as quickly as possible.