The Central Bank of Cyprus (CBC) has officially set the reference interest rate at 11.50%, exercising its authority under Article 314A of the Cyprus Criminal Code (Cap. 154). This decision establishes a legal limit on interest rates for various financial transactions, ensuring compliance with national financial regulations.
Under the provisions of Article 314A, individuals or entities engaged in lending, extending payment deadlines, renewing loans, or discounting debts must not charge or receive financial benefits exceeding the established reference interest rate. Any violation of this regulation constitutes a criminal offense and carries significant legal consequences.
Those found guilty of exceeding the reference interest rate may face up to five years of imprisonment, a fine of up to €30,000, or both penalties combined. The CBC has emphasized the importance of compliance with this regulation to maintain financial stability and prevent exploitative lending practices.
By enforcing this interest rate cap, the Central Bank aims to ensure transparency and fairness in financial transactions while protecting both borrowers and the broader economy from excessive interest charges.
Source: Stockwatch Cyprus