CBC sets usury reference rate at 11.84 per cent
The Central Bank of Cyprus (CBC) has announced that the reference interest rate used to define the criminal offence of usury has been set at 11.84 per cent.
The determination of the reference interest rate is made in accordance with article 314A of the Cyprus Criminal Code, Cap.154.
The aforementioned article strictly defines the criminal offense, stating that “a person who, when providing any loan, when providing or extending the payment term, when renewing or discounting a loan, receives, collects, charges, stipulates or takes for his own benefit or on behalf of a third party financial benefit or property benefits which exceed the reference interest rate, commits an offense and, in case of conviction, is liable to a term of imprisonment not exceeding five (5) years or a fine not exceeding thirty thousand euros (€30,000) or both penalties”.
The reference rate serves as the legal ceiling for interest charges on loans in the Republic of Cyprus.