EU approves rescue plan for Cypriot cooperative banks

The European Commission on Monday approved a rescueplan for Cyprus' cooperative banks, some 10 months after the islandwas granted an international bailout, dpa reported.The plan foresees a reduction via a series of mergers in the numberof cooperatives, from close to 100 to just 18. The ownership of theresulting entities is to be transferred from customers to the state."This decentralised structure and closeness with borrowers led tocareless lending, with no serious verification of the ability of theborrowers to repay their loans, and to a culture ofnonrepayment," the commission wrote.Non-performing loans - those which are not being repaid - are to behandled separately from the lenders' remaining business. They make upmore than 40 per cent of overall loans in the cooperative sector,according to EU officials in Brussels.