Banks on the tax haven of Cyprus opened Thursday for the first time in 12 days amid the island's continuing financial crisis, but the country's financial controls could remain in place for another month.
Strict limits on the amount of money that could be withdrawn have been imposed – people will be able to withdraw 300 euros ($383) a day and no checks will be cashed – amid fears of a run on the banks.
Account holders showed up hours before the banks were due to open to get in line.
Early indications were that there was no mass rush to withdraw cash, with just 13 people waiting outside one large Bank of Cyprus branch on the island as it opened at noon local time (6 a.m. ET). They were surrounded by a scrum of journalists.
“We need only from you cooperation, understanding and please patience,” the manager of the branch said before opening.
However a small crowd of people did press against the doors of a branch of Laiki Bank, which is being liquidated. CNBC sources estimate those with more than 100,000 euros (about $128,000) in accounts in Laiki Bank could lose 40 to 70 percent of their deposits.
During the banking shutdown, people could only withdraw 100 euros (about $127) a day from the country's two biggest banks, using ATMs. Most who lined up for the opening Thursday were elderly people and those without ATM cards.
Deposits above 100,000 euros with the Bank of Cyprus will be frozen and 40 percent of each account will be converted into bank stock. Accounts in both banks with balances under 100,000 euros will be fully protected.
A previous proposal to take less from all bank accounts was vetoed by the Cypriot parliament.
Later Thursday, the Cypriot foreign minister Ioannis Kasoulides said curbs on money movement would remain in place longer than originally planned, "probably over a period of about a month," according to Reuters.
The country is seeking to meet the terms of a bailout from the European Union of 10 billion euros ($12.9 billion) and, in order to raise enough funds to meet strict conditions imposed by the EU, it is preparing to take money from bank accounts.
Ahead of the banks’ reopening, money was flown into the island and guards were seen delivering cash to banks in armored vehicles.
The banks were due to close at 6 p.m. local time (12 p.m. ET).
There was some relief on the island that the banks were finally opening again, but this was mixed with fear about what could happen.
Yorgos Georgiou, who owns a dry cleaning business in Nicosia, told Reuters that "finally people's mood will be lifted and we can start to trust the system again."
But he added: "I'm worried about the poor kids working in the cashiers today, because people might vent their anger at them. You can't predict how people will react after so many days."
Kostas Nikolaou, a 60-year-old retiree, told Reuters that the uncertainty of the past two weeks had been "like a slow death."
"How can they tell you that you can't access your own money in the bank? It's our money, we are entitled to it,” he added.
The country’s president, Nicos Anastasiades, has described the bailout deal as “painful” but essential.
However, Nobel laureate economist Christopher Pissarides said it was “extremely unfair to the little guy.”
“For the first time in the euro zone, depositors are (being) asked to bail out failing banks," he said. "Now that used to be the case in the 1930s, especially United States (and) caused big bank runs. It has been decided since then that we shouldn’t allow that to happen again.”
Among other controls, the island's central bank will review all commercial transactions over 5,000 euros and scrutinize transactions over 200,000 euros on an individual basis, Reuters reported. People leaving Cyprus can take only 1,000 euros with them. An earlier draft of the decree had put the figure at 3,000.
Reuters summed up the situation facing the island:
With just 860,000 people, Cyprus has about 68 billion euros in its banks - a vastly outsized financial system that attracted deposits from foreigners as an offshore haven but foundered after investments in neighboring Greece went sour.
The European Union and International Monetary Fund concluded that Cyprus could not afford a rescue unless it imposed losses on depositors, seen as anathema in previous euro zone bailouts. The bailout looks set to push Cyprus deeper into an economic slump, shrink the banking sector and cost thousands of jobs.
European leaders said the bailout deal averted a chaotic national bankruptcy that might have forced Cyprus out of the euro.
Many Cypriots say the deal was foisted upon them by Cyprus's partners in the 17-nation euro zone within the European Union, and some have taken to the streets to vent their frustration.
CNBC's Michelle Caruso-Cabrera and Katie Slaman, and Reuters contributed to this report.