The Central Bank of Cyprus (CBC) set the reference interest rate at 11.60 per cent on Friday, under provisions of the Criminal Code aimed at preventing excessive charges on loans.

The rate is determined under Article 314A of the Cyprus Criminal Code, Cap. 154, which makes it a criminal offence for lenders to demand or receive financial or other benefits exceeding the prescribed reference rate.

The provision applies when a loan is granted, its repayment period is extended, or an existing loan is renewed or discounted.

It covers benefits received, collected, charged, stipulated or obtained either for the lender’s own benefit or on behalf of a third party.

Anyone convicted of breaching the provision faces up to five years in prison, a fine of up to €30,000, or both penalties.

The CBC determines the reference rate in accordance with its powers under the legislation, with the latest announcement setting it at 11.60 per cent.