The National Solidarity Fund (NSF) compensation process is set for another round of payments, with around 1,200 applicants expected to gain access to a platform to submit their IBAN details, while a new application window is planned for those who missed the 2025 deadline.
The developments were discussed on Monday by the House Finance Committee during its examination of the 2026 budget of the National Solidarity Fund, amounting to €28.7 million.
€28.7 million allocated for 2026
Of the total €28.7 million, €18 million will go to beneficiaries who received 10% compensation in 2025 and are due an additional 2.5% this year.
A further €10 million will cover three categories of beneficiaries whose cases remained pending from 2025. These include around 1,200 people who had not entered their IBAN details, applicants whose appeals were accepted and beneficiaries who encountered problems during the payment process.
Around 7,160 people have so far received some form of compensation from the Fund.
The Fund currently has reserves of around €240 million. A further €50 million is expected to be added in 2027, according to the Finance Ministry’s Director General Andreas Zachariades.
Platform opens for 1,200 beneficiaries
The platform for around 1,200 beneficiaries who failed to register their IBAN is expected to open on Tuesday or Wednesday.
Zachariades told MPs that they will be able to confirm the amount due to them and enter their bank details so that payment can proceed.
A new application window is also expected to open between late October and early November for beneficiaries who did not apply in 2025.
The new scheme will concern Solidarity Fund compensation planned for 2027, with the amount depending on the state’s fiscal capacity, Zachariades said.
No commitment yet for former shareholders
The issue of former bank shareholders also remains unresolved, as the current compensation process covers depositors and holders of securities.
Zachariades said a legal opinion from the Law Office had concluded that it is ultimately at the discretion of the National Solidarity Fund whether former shareholders are included in a future scheme.
Any new scheme, including the one planned for 2027, will be prepared by the Fund’s board and submitted to the Finance Minister.
Around 90,000 former shareholders are affected, according to figures presented to the Finance Committee, with many cases involving relatively small amounts.
Jenny Papacharalambous, director general of the Cyprus Banks Borrowers Protection Association (SYPRODAT), said former shareholders were not all major investors and that many were ordinary citizens who had entrusted their life savings to the banking system.
Provident funds still awaiting agreement
The issue of provident funds belonging to bank employees who were affected by the 2013 haircut also remains pending.
DISY MP Savia Orphanidou recalled an agreement between the President, Bank of Cyprus and ETYK providing for compensation of up to 75% for employees who left before 2017.
Zachariades said the matter was not directly linked to the National Solidarity Fund and that an initiative was under way to reach an agreement.
He said procedural and other issues still had to be resolved before any announcement could be made.
€28 million claim by 841 provident fund members
Panikos Koursaris, representing the Cyprus Investors Recovery Action Group, said the group was seeking around €28 million for 841 people.
He said the members had effectively suffered losses twice and argued that an error in their case had been recognised and should be corrected.
Legal costs remain unresolved
The Finance Committee also discussed legal costs owed by people who took legal action against the state following the haircut.
The cases involve citizens who filed lawsuits in the years after the haircut and later withdrew them but were ordered to pay legal costs.
Zachariades said the amounts resulted from court decisions and were therefore difficult to overturn.
A representative of the Law Office said the Attorney General could not simply write off amounts arising from court judgments. Each debtor’s financial circumstances would have to be examined individually.
The Law Office has so far shown tolerance in collecting the amounts, with no enforcement measures taken against debtors. However, officials stopped short of committing to maintaining that approach in the future.
Beneficiaries demand higher annual payments
Stavros Yallourides of the Association of Security Holders criticised the reduction in annual compensation from 10% in 2025 to 2.5% this year.
He called for a more substantial annual payment and also demanded that legal costs owed by affected citizens be eliminated.
Andonis Papakonstantinou of the Laiki Bank Depositors Association (SYKALA) also criticised what he described as delays in fulfilling commitments made in previous years.
He said the original planning envisaged a fourth payment by 2026, while the second payment had yet to be completed.
The compensation process therefore remains open on several fronts, including the treatment of former shareholders, provident funds, legal costs and the size of future payments.
Also read: Bank haircut compensation may fall sharply this year
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