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Strict limits on the amount of money that could be withdrawn have been imposed – people will be able to withdraw 300 euros ($383) a day and no checks will be cashed – amid fears of a run on the banks.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.

'Slow death'
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.

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This story was originally published on Thu Mar 28, 2013 4:52 AM EDT

Yiannis Kourtoglou / AFP - Getty Images

Employees of the Bank of Cyprus frown as they demonstrate outside the main office of the bank in Nicosia on Tuesday.

NICOSIA, Cyprus - Anguished Cypriots fear a run on banks when branches on the tiny tax haven reopen for first time in almost two weeks on Thursday.

Since March 16, customers have only been able to withdraw limited amounts of cash from ATMs after banks closed to allow Cypriot officials and European leaders to hammer out a 10-billion euro ($13-billion) rescue meant to avert a chaotic national bankruptcy.

However, some believe the deal will instead push the country further into economic crisis as thousands of bank employees lose their jobs. The country's unemployment rate is about 14 percent.

Under the terms of the EU bailout, accounts of more than 100,000 euros ($128,460) at the islands' two biggest banks will be frozen. Depositors with accounts at Laiki Bank, which is being liquidated, won't get paid for years and won't get all of their money back. CNBC sources estimate those with bank accounts in Laiki above 100,000 euros could lose 40 to 70 percent of their deposits.

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.

Many Cypriots say they do not feel reassured by the bailout deal and are expected to besiege banks as soon as they open their doors Thursday.

"We have an uncertain future in in Cyprus," said Chris Sofroniou, as he waited in an ATM line in Nicosia. "There's uncertainty in our future in our children, and we are very, very disappointed with the European Union. We are being treated like third-class citizens and we are very, very angry."

A spokeswoman for the island's central bank said banks would not reopen until 12 p.m. local time (6 a.m. ET) on Thursday, according to Reuters.

The spokeswoman said banks would open their doors between midday and 6 p.m. (1600 GMT). The Cypriot authorities are expected later on Wednesday to detail the capital controls they plan to impose to prevent a flight of funds. 

The last-minute deal was reached Monday, just hours before the EU was due to cut off the country’s financial lifelines.

Katia Christodoulou / EPA

A woman walking past a boarded up branch of the Bank of Cyprus branch in Nicosia on Wednesday.

The agreement ended a week of protests in Cyprus, long lines at cash machines, and a tense geopolitical standoff after European officials made the unprecedented demand that ordinary Cypriot savers share in the cost of any bank bailout.

Cyprus promoted itself as an offshore financial haven by making depositing money there attractive to foreigners. The result? A financial sector that dwarfed the rest of the economy.

Without that deal, Cyprus’ banks would have collapsed, dragging down the economy and potentially pushing it out of the euro zone.

'Extremely unfair'
While the country’s president, Nicos Anastasiades, called the deal “painful” but essential, Nobel laureate economist Christopher Pissarides said the bailout 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.”

Finance Minister Michael Sarris said that the government was implementing measures to halt a run on the banks when they opened on Thursday, although he did not go into detail, according to Reuters.

It isn’t only bankers and the wealthy who are angry, however. On Wednesday, around 3,000 high school students protested the plan agreed to with the European Union, International Monetary Fund and European Central Bank.

"They've just got rid of all our dreams, everything we've worked for, everything we've achieved up until now, what our parents have achieved," a student named Thomas told Reuters. 

So as Cyprus waited to see what Thursday would bring, citizens mourned what they saw as the end of an era. 

“It’s the destruction of the country,” Cypriot Aristos Sardi said. “Who they think they are? For this country the colonial days finished in the 1960s.”

“I am heartbroken,” he added.

NBC News' F. Brinley Bruton, Reuters and The Associated Press contributed to this report.

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This story was originally published on Wed Mar 27, 2013 11:00 AM EDT

Handout / Reuters

Employees of the Korean Broadcasting System (KBS) check computers as they try to recover a server of the company's network at main office of KBS in Seoul, on March 21.

SEOUL - A hacking attack on the servers of South Korean broadcasters and banks originated from an IP address based in China, officials in Seoul said on Thursday, raising suspicions the intrusion came from North Korea.

An unnamed official from South Korea's presidential office was quoted by the Yonhap news agency as saying the discovery of the IP address indicated Pyongyang was responsible for the attack on Wednesday.

A previous attack on a South Korean newspaper that the government in Seoul traced back to North Korea also used a Chinese IP address.

"We've identified that a Chinese IP is connected to the organizations affected," a spokesman for South Korea's Communications Commission told a press conference. 

The attack brought down the network servers of television broadcasters YTN, MBC and KBS as well as two major commercial banks, Shinhan Bank and NongHyup Bank. South Korea raised its alert levels in response.

Investigations of past hacking incidents on South Korean organizations have been traced to Pyongyang's large army of computer engineers trained to infiltrate the South's computer networks.

"There can be many inferences based on the fact that the IP address is based in China," the communications commission's head of network policy, Park Jae-moon said. "We've left open all possibilities and are trying to identify the hackers."

It took the banks hours to restore operations. Damage to the servers of the TV networks was believed to be more severe, although broadcasts were not affected.

About 32,000 computers at the six organizations were affected, according to the South's state-run Korea Internet Security Agency, adding it would take up to five days to fully restore their functions.

Earlier story: South Korea on alert after hackers strike banks, broadcasters

North Korea has in the past targeted South Korea's conservative newspapers, banks and government institutions.

The biggest hacking effort attributed to Pyongyang was a 10-day denial of service attack in 2011 that antivirus firm McAfee, part of Intel Corp, dubbed "Ten Days of Rain". It said that attack was a bid to probe the South's computer defenses in the event of a real conflict.

North Korea last week said it had been a victim of cyber attacks, blaming the United States and threatened retaliation.

Cyprus's parliament overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout on Tuesday, plunging one of the smallest European states closer to financial oblivion.

The rejection, with 36 votes against, 19 abstentions and one absence, brought Cyprus to the brink of financial meltdown.

But jubilant crowds outside parliament broke into applause, chanting: "Cyprus belongs to its people."

"The voice of the people was heard," said Andreas Miltiadou, a 65-year-old pensioner among the demonstrators.

The European Central Bank said it was in contact with its IMF and EU partners and remained committed to providing liquidity within certain limits.

"The ECB takes note of the decision of the Cypriot parliament and is in contact with its troika partners," the bank said in a statement, according to Reuters. "The ECB reaffirms its commitment to provide liquidity as needed within the existing rules."

The widely criticized bailout deal looked set to collapse despite a last-minute compromise attempt Tuesday.

The European deal could also be scuppered by a furious Russia, which is one of the biggest foreign investors in Cyprus and which stands to be among the biggest losers.

Reuters said the situation had “potentially severe consequences for the rest of the troubled euro zone.”

One analyst told CNBC Russia might even seek revenge by disrupting energy supplies to Europe. Russian President Vladimir Putin on Monday criticized the bailout as "unfair, unprofessional and dangerous."

There were media reports that Cypriot Finance Minister Michael Sarris, who was in Moscow Tuesday, had resigned, but he told Reuters by text message that there was "no truth" to the claim, which had further rattled nerves over the crisis.

Cypriots awoke Saturday to the surprise announcement that up to 10 per cent of their bank account deposits might be seized as part of a $13 billion rescue package agreed by the European Union countries and the International Monetary Fund (IMF).

Banks on the Mediterranean island have been ordered to remain closed until Thursday amid fears of a massive rush to withdraw deposits in advance of the deal, further precipitating a financial collapse that could cause an economic ripple effect throughout the region and beyond.

Thousands withdrew savings over the weekend, emptying ATMs and sending global money markets into a steep dive.

Panicos Demetriades, chief of the country's central bank, told the Cypriot parliament's finance committee Tuesday that banks stand to lose more than 10 percent of their deposit base within a matter of days if a levy on bank deposits is imposed.

The European bailout has been widely criticized by commentators. In an editorial, Bloomberg said it was the “worst” decision of the entire regional financial crisis, while the Economist panned it as "unfair, short-sighted and self-defeating."

Cypriot and euro-zone officials sought to soften the initially proposed levy of up to 9.9 percent, ensuring that deposits below the value of $25,000 were not affected, in order to ease the burden on small savers and overcome lawmaker opposition, CNBC reported.

Adding to the uncertainty, Greek media reports have suggested Russian energy giant Gazprom might offer Cyprus an alternative bailout deal.

Russian citizens account for the majority of the billions of euros held in Cypriot banks by foreign depositors, and Moscow has already given the Mediterranean country a sovereign loan to ease its financial crisis.

Steve Keen, professor of economics and finance at Australia's University of Western Sydney, told CNBC that Russia could retaliate against the perceived proxy attack on its citizens and their money.

"If you try to target the Russians, and there's President Putin acting under the image of the 'strong man' of Russia, why would he not then decide to shut down gas supplies to Germany until that was righted?" he said.

“If you're going to attack money laundering then attack it directly, don't make Cypriot peasants and small businessmen collateral in your campaign against Russian oligarchs. Declare the campaign rather than doing it under the carpet like this too," he added.

Reuters and NBC News' Ian Johnston contributed to this report.

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Full business coverage from NBC News

This story was originally published on Tue Mar 19, 2013 9:01 AM EDT

NEW YORK -- U.S. authorities said on Monday that they had seized $150 million from a Lebanese bank suspected of being at the heart of international money-laundering schemes linked to the Lebanese Shiite group Hezbollah.

In February 2011, the U.S. Treasury department designated the Lebanese Canadian Bank as a "primary money-laundering concern." The privately owned bank was subsequently merged with the Lebanese subsidiary of Societe Generale.

Federal prosecutors in Manhattan and the U.S. Drug Enforcement Administration accused bank officials of knowingly participating in a scheme in which money from various individuals and companies in Beirut was sent from Lebanon to purchase used cars in the United States. The cars were then sold in West Africa, and Hezbollah-linked groups would help smuggle the proceeds into Lebanon, authorities said.

Hezbollah is a Shiite Islamist guerrilla and political movement founded with Iran's help after the Israeli invasion of Lebanon in 1982.

Report: HSBC allowed money laundering that likely funded terror, drugs

Washington considers Hezbollah to be a terrorist group. U.S. officials say that it has become increasingly involved in the drug trade, facilitating the distribution and sale of cocaine in West Africa.

The money seized was held in corresponding accounts at five different banks in the United States, including Citibank and London-based bank Standard Chartered. The five banks have not been accused of any wrongdoing.

Standard Chartered, NY regulator reach $340M settlement over Iran-linked transactions

An attorney for the Lebanese Canadian Bank did not immediately return a call seeking comment.

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Luke Macgregor / Reuters, file

A HSBC bank logo is highlighted by the sun in London in this file photo taken March 1, 2010.

A "pervasively polluted" culture at HSBC allowed the bank to act as financier to clients moving shadowy funds from the world's most dangerous and secretive corners, including Mexico, Iran, Saudi Arabia and Syria, according to a scathing U.S. Senate report issued on Monday.

The report [link to PDF here] which comes ahead of a Senate hearing on Tuesday, said large amounts of Mexican drug money likely passed through the bank. 

HSBC's U.S. division provided money and banking services to some banks in Saudi Arabia and Bangladesh believed to have helped fund al-Qaida and other terrorist groups, according to an Al-Jazeera story on the report.

While the big British bank's problems have been known for nearly a decade, the Senate probe detailed just how sweeping the problems have been, both at the bank and at the Office of the Comptroller of the Currency, a top U.S. bank regulator which the report said failed to properly monitor HSBC.

"The culture at HSBC was pervasively polluted for a long time," said Senator Carl Levin, chairman of the U.S. Senate Permanent Subcommittee on Investigations, a Congressional watchdog panel.

The report comes at a troubling time for a banking industry reeling from a multi-country probe into the manipulation of global benchmark rates. Last month, rival British bank Barclays agreed to pay a $453 million fine to settle a U.S.-British probe into the rigging of the benchmark interest rate known as the London interbank offered rate, or Libor.

Lax controls
The report caps a year-long inquiry that included a review of 1.4 million documents and interviews with 75 HSBC officials and bank regulators. It will be the focus of a hearing on Tuesday at which HSBC and OCC officials are scheduled to testify.

Banks pulling out of rate-setting panels in wake of Libor scandal

In a statement emailed to NBCNews.com, the bank said: 

We will apologize, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong. We believe that this case history will provide important lessons for the whole industry in seeking to prevent illicit actors entering the global financial system.

The report also contained strong criticism of the OCC, saying the regulator failed to crack down on the bank despite multiple red flags, allowing money laundering issues "to accumulate into a massive problem".

The failings and lax controls inside HSBC included an inability to properly monitor $15 billion in bulk cash transactions between mid-2006 and mid-2009, inadequate staffing and high turnover in the bank's compliance units, the report said.

HSBC ignored risks in doing business in countries such as Mexico, a country rife with drug trafficking, it said.

Between 2007 and 2008, HSBC's Mexican operations moved $7 billion into the bank's U.S. operations. According to the report, both Mexican and U.S. authorities warned HSBC that the amount of money could only have reached such a level if it was tied to illegal narcotics proceeds.

The focus of the Senate probe was HSBC's U.S. operations, which has its main office in New York. HSBC used the U.S. unit as a selling point to clients outside the United States, touting its ability to handle U.S. dollar transactions.

Red flags
The report described that among HSBC's problems was the bank's compliance division being unable to battle the suspect money. High turnover of top compliance officials made it difficult for reform to take hold, the report said. Employees were "overwhelmed" by a mounting number of suspect transactions that needed review.

HSBC, according to the report, helped move money for a Mexican foreign-exchange dealer called Casa de Cambio Puebla that served as a hub for laundered proceeds, according to the report.

Banks' bad behavior may be scaring away investors

Between 2005 and 2007, there was a "growing flood" of U.S. dollars moving between the exchange house and HSBC, setting off red flags inside HSBC. Some bankers said the transfers were legal. One said the money came from Mexican landscapers working in the United States and routing money back home to their families.

HSBC ultimately closed the account in November 2007 after it received a seizure warrant from the Mexican attorney general seeking money tied to the exchange dealer, the Senate report said.

Some of the money that moved through HSBC was tied to Iran, the report said, which would violate U.S. prohibitions on transactions linked to it and other sanctioned countries.

Between 2001 and 2007, more than 28,000 transactions were identified by an outside auditor for HSBC that potentially could have run afoul of laws that prohibit transactions with sanctioned countries. Of those, 25,000 involved Iran. A smaller number required additional analysis to determine if violations of U.S. regulations had occurred, the report said.

In 2010, Wachovia agreed to pay $160 million as part of a Justice Department probe that examined Mexican transactions, according to a BBC report, which also said ING last month agreed to pay $619 million to settle U.S. government allegations that it violated U.S. sanctions against Cuba and Iran.

Reuters contributed to this report.

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