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(Recast) Greek banks may reopen Monday after ECB decision to raise ELA: sources

Xinhua, July 17, 2015 Adjust font size:

Greek banks may reopen as early as Monday following the European Central Bank's (ECB) decision Thursday to raise the Emergency Liquidity Assistance (ELA) limit for Greece's banking sector, banking sources told local media.

Following the ECB approval to raise the ELA limit for Greek lenders by 900 million euros (980 million U.S. dollars), banking sources told Greek national news agency AMNA they expected the reopening of all bank branches nationwide as early as Monday.

Since June 29, all bank branches in Greece have been closed, with the exception of 1,000 branches that serve only pensioners and the unemployed with no debit cards.

However, the same sources stressed capital controls would will not be lifted. Depositors will most likely continue to face a withdrawal limit of up to 60 euros per card per day.

A former Finance Ministry official told Xinhua anonymously he interpreted the ECB's decision as a first step towards the reopening of banks Monday and a review of the daily withdrawal limit.

Capital controls will most likely be retained for a few more weeks if not months to avert a bank run, experts said.

The current limit may be gradually increased, other sources told local media such as "Vima" (Tribune) daily. "At the moment, the reopening of banks on July 20 is a 50-50 possibility," they estimated.

ECB president Mario Draghi on Thursday said the conditions had been restored for the release of more ELA funds to Athens.

He appeared confident that Greece would make a 3.5 billion euro repayment of bonds to the ECB due Monday with creditors' help.

The Eurogroup Thursday also announced the immediate disbursement of 7 billion euros to Greece to cover the ECB payment, as well as further financial obligations to International Monetary Fund next week. Enditem