The Central Bank of Cyprus rejects applications from banks outside the European Union for their activation in the Cypriot market due to the global economic crisis. The material that was submitted to the Supreme Court after the appeal of the Montenegrin Bank Altasmont against the CB decision not to examine its application, shows how hesitant the supervisory authority is to open the doors of the domestic banking system to banks from third countries.

According to a StockWatch report released yesterday, Atlasmont, which has a representation office in Limassol, applied in May for the opening of a branch so as to exercise banking activities on the island. In June, the CB rejected the application, stressing that it does not examine bank licenses.

In its reply to the foreign bank, published by StockWatch today, the CB supervision department explained that “the Central Bank of Cyprus, after a careful evaluation of the ongoing global economic crisis, decided not to proceed with the examination of applications for banking licenses at the current stage”.

Some support that Atlasmont is not the only bank that has been rejected in writing or verbally. The CB avoided commenting on the issue.

There are currently seventeen banks outside the European Unions that have branches in Cyprus.

In the past three years, the CB granted a license to only one third country bank.

Commenting on the CB stance, some say that it jeopardizes state’s target to make Cyprus a financial services hub.

“Cyprus must be given a boost as a financial center. Due to the economic crisis, Cyprus should have been more open to foreign banks that offer job posts and investment funds”, Atlasmont lawyer stated.