Central Bank of Cyprus sets reference interest rate at 11.60 per cent

Nicosia, Cyprus. The Central Bank of Cyprus (CBC) announced on Friday that the reference interest rate stands at 11.60 per cent, as part of rules intended to prevent excessive charges on loans.

Legal basis

The rate is fixed under Article 314A of the Cyprus Criminal Code, Cap. 154. Under this article, it is a criminal offence for a lender to demand or receive financial or other benefits that go beyond the prescribed reference rate. The CBC sets the rate using the powers granted to it by the legislation, and its latest announcement puts the figure at 11.60 per cent.

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When the provision applies

The rule is relevant when a loan is granted, when its repayment period is extended, or when an existing loan is renewed or discounted. It covers benefits that are received, collected, charged, stipulated or obtained, whether for the lender personally or on behalf of a third party.

Penalties

A person convicted of breaching the provision faces a prison term of up to five years, a fine of up to €30,000, or both.