Bank of Cyprus depositors with over €100,000 could lose up to 60%

Bank of Cyprus depositors with more than 100,000 euros could lose up to 60% of their savings as part of an EU-IMF bailout restructuring move, BBC resports officials saying.

The central bank says 37.5% of holdings over €100,000 will become shares as up to 22.5% will go into a fund attracting no interest and may be subject to further write-offs.

The other 40% will attract interest - but this will not be paid unless the bank performs well.

Cypriot officials have also told BBC that big depositors at Laiki - the country's second largest bank - could face an even tougher "haircut". However, no details have been released.

The officials say that Laiki will eventually be absorbed into the Bank of Cyprus.

The fear is that once the unprecedented capital controls - which are in place for an indefinite time - are lifted, the wealthiest will rush to move their deposits abroad, BBC reports.

The larger than expected loss could also have devastating consequences for large depositors such as schools and universities. And it could spread fear in other indebted eurozone countries that Cyprus might set a precedent.

Cyprus needs to raise €5.8bn euros to qualify for the bailout, and has become the first eurozone member country to bring in capital controls to prevent a torrent of money leaving the island and credit institutions collapsing.