Nicosia: The Central Bank of Cyprus (CBC) has set the reference interest rate, as provided for under Article 314A of the Cyprus Criminal Code, at 11.32%, according to an announcement issued on Friday.
According to Cyprus News Agency, the reference rate is determined by the CBC in accordance with the provisions of Article 314A of the Criminal Code (Cap. 154), which establishes the maximum permissible interest rate for certain lending transactions under Cyprus law. This legislative framework is designed to regulate interest rates and prevent financial exploitation in lending agreements.
Under the legislation, any person who, when granting a loan, extending a payment deadline, renewing, or discounting a loan, receives, charges, or stipulates a financial or property benefit exceeding the reference interest rate commits a criminal offence. This measure is intended to protect borrowers from exorbitant interest rates that could lead to financial distress.
The law stipulates that anyone convicted of such an offence is liable to imprisonment for up to five years, a fine of up to £30,000, or both. This strict penalty underscores the seriousness with which Cyprus law views violations of interest rate regulations.
The CBC periodically determines and publishes the reference interest rate in line with its statutory responsibilities under the Criminal Code. This ensures transparency and compliance in financial transactions across the country, maintaining the integrity of the financial system.