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The Central Bank of Cyprus has set the country’s reference interest rate at 11.72%, drawing a clear legal line for what counts as excessive and illegal lending.
In a statement, the Central Bank of Cyprus said the rate was calculated under the Criminal Code, which is used to determine when interest charges cross into unlawful territory.
Put simply: charge more than that, and you could be breaking the law.
The rule applies across a wide range of financial activity, from issuing loans and extending payment deadlines to refinancing or early repayment agreements. If a lender is found to be collecting benefits that exceed the 11.72% threshold, they could face serious consequences.
Those penalties are not minor.
Violations can lead to up to five years in prison, a fine of up to €30,000, or both.
The announcement acts as both a benchmark and a warning, particularly at a time when borrowing costs and financial pressure remain high for many households and businesses.
For everyday borrowers, the rate serves as a kind of safety net, designed to prevent exploitative lending practices. For lenders, it’s a reminder that there are strict limits and real consequences if those limits are crossed.
In short, the message from the Central Bank is clear: there’s a ceiling, and it’s now set at 11.72%.
