Wealthy depositors in the Bank of Cyprus could face losses of as much as 60 per cent — far in excess of what had been expected — as the country scrambles to save what is left of its stricken banking sector.

Depositors with more than 100,000 euros in Bank of Cyprus are set to get shares in the bank in exchange for at least 37.5 per cent of their uninsured deposits, while a further 22.5 per cent of their deposits will be put into a special fund attracting no interest and could see a further write offs.

The haircut on depositors was a condition for Cyprus receiving 10 billion euros in bailout funds from the European Union and the International Monetary Fund, but it was though that around a 40 per cent haircut would be the end of it.

Officials say that the haircut could be moved up from 37.5 per cent to 45 per cent.

Large depositors in Laiki Bank, which is being broken into good and bad banks, are likely to see nearly all of their assets written off.

The bailout by international lenders averted a meltdown of the financial sector that threatened the country’s euro membership but forced large losses on big deposits in the island.

Cyprus became the first eurozone country ever to apply capital controls in an effort to prevent a vast outflow of euros after its banks reopened on Thursday, following a 10-day closure.

Residents of Cyprus are able to withdraw no more than 300 euros in cash per day from each bank where they hold an account and local businesses have to limit transactions to 5,000 euros a day.

Credit card transactions are limited to 5,000 euros a month, while Cypriot customs officials will ensure that travellers take just 1,000 euros in bank notes out of the country per trip.

Some 18 per cent of the deposits held in Cypriot banks by residents of other eurozone countries were pulled out in February, according to figures published on Thursday by the Central Bank of Cyprus. Such deposits in Cyprus had fallen 41 per cent since last June to 3.9 billion euros, the data showed.