In 2011 the Criminal Code was amended by the addition of a new article 314A, which makes it a criminal offence, punishable by up to 5 years' imprisonment, a fine of up to EUR30,000 or both, for lenders to charge interest at excessive rates. The maximum permissible rate of interest, known as the reference rate, is set by the Central Bank of Cyprus at three-monthly intervals based on the average interest rates charged by credit institutions plus an uplift of 50 per cent. Loans made by authorised credit institutions, loans between associated companies and loans of more than EUR 1 million to companies financed from overseas are not subject to the limit.
The Central Bank of Cyprus has announced an increase in the reference rate to 9.63 per cent (from its previous level of 9.47 per cent) with effect from 26 October 2018.
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