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Central Bank grants banking business licence to Austrian Bank.

18/07/2002 16:06
The Central Bank of Cyprus has granted a Banking Business Licence to “Kommunalkredit International Bank Ltd”, a wholly owned subsidiary of “Kommunalkredit Austria AG”, to carry on banking business in and from Cyprus in the form of an international Banking Unit (IBU).

Kommunalkredit Austria AG was established in Austria in 1958 as a special purpose bank to provide low interest and long term finance for Austrian local authorities. It is a highly rated bank by international standards and its current activities include the financing of Austrian and other European local authorities in connection with infrastructural projects, the management of trust funds and the provision of consulting activities in relation to environmental projects and treasury activities.

“Kommunalkredit International Bank Ltd” will deal primarily in foreign currencies and transact business with natural or legal persons who are non-residents of Cyprus, situated either in Cyprus or abroad. As an exception, medium and long term lending in foreign currencies to Cyprus residents has been allowed within the framework of liberalizing Cyprus’ financial system, as from January 1, 2001. The main purpose of the new bank will be the finance of public sector entities in Austria, Switzerland, Central and Eastern Europe in relation to environmental and energy projects. “Kommunalkredit International Bank Ltd” will be subject to the supervision and inspection of both the Central Bank of Cyprus and the banking supervisory authorities of Austria.

Kommunalkredit Austria AG is the first bank from Austria which has been allowed to establish an International Banking Unit in Cyprus. Its decision to carry on banking business from within Cyprus through a wholly owned subsidiary is another indication of Cyprus’ success in attracting international banks and financial institutions as a result of Cyprus’ international recognition as a reputable regional banking/financial center and of the business opportunities which are expected to arise with the accession of Cyprus to the European Union.

Currently there are 29 IBUs operating from within Cyprus and 3 representative Offices of foreign banks in Cyprus. Other foreign banks have expressed a similar interest to establish IBUs in Cyprus and more banking business licenses are expected to be granted in the near future.