NICOSIA, March 26 (Xinhua) -- Bank of Cyprus chairman Andreas Artemis on Tuesday resigned from his post in protest at the punishing conditions of a bailout for the country's banking sector and the appointment of an administrator at the bank without the Board being briefed in advance.
Artemis also said in a letter to the minister of finance and the governor of the Central Bank that he objected to the planned takeover of the bank's Greek units by the Bank of Piraeus.
The banks board will meet on Tuesday afternoon to consider his resignation.
Artemis said in his letter that he dissented with the forced takeover of Cyprus Popular (Laiki) Bank by Bank of Cyprus along with a 9.2 billion debt in emergency liquidity assistance without prior consultation with the bank's Board.
Central Bank governor Panicos Demetriades sent a letter to the Bank of Cyprus Board on Monday cancelling all its powers and also the powers of shareholders.
The Central Bank, acting in its capacity as Resolving Authority under an emergency law passed by parliament last week, and in cooperation with the minister of finance, also issued resolution orders for Bank of Cyprus and Laiki.
It also appointed a receiver for each bank to apply consolidation measures at the two banks.
Under a bailout deal for Cyprus, the Eurogroup decided the spin off of Cypriot bank units in Greece. An agreement expected to be finalized on Tuesday provides that Bank of Piraeus will take over the Greek operations of all three Cypriot banks.
The Eurogroup has also demanded the takeover of Laiki bank by Bank of Cyprus.
Depositors in Laiki with accounts of over 100,000 euros (about 130,000 U.S. dollars) and holders of the bank's equity will bear the cost of the resolution of the bank.
Uninsured depositors of Bank of Cyprus would also take a loss, which finance minister Michael Sarris said could be up to 40 percent.
Banks were ordered to stay closed until Wednesday inclusive, and instructions are expected to be issued by the Central Bank imposing a limit on bank transfers and withdrawals when banks reopen on Thursday.
Sarris said he expects the limits to last for only a few weeks.