"The purpose of the decree is the sale of the operations of the [FBME] branch with the aim of the protection of depositors," said Monday's decree, published in the official Gazette of the Republic and signed by the Governor Chrystalla Georghadji, CBC Council member Stelios Koiliaris and Senior Manager Yiorgos Syrichas.
The decision shows the commitment of the Cypriot independent institutions to safeguard financial stability, Government Spokesman Nicos Christodoulides stressed on Tuesday.
Last week, a US Treasury report implicated the bank in money laundering.
"FBME was involved in at least 4,500 suspicious wire transfers through U.S. correspondent accounts that totalled at least $875 mln between November 2006 and March 2013," the report said.
The lender sought to clarify its position with an announcement saying that "as a result of the financial uncertainty in Cyprus in the past two years, FBME Bank commissioned a detailed assessment by the German office of a leading international accountancy firm into its operations and practices, which found that the Bank's services are indeed in compliance with applicable anti-money laundering rules of the Central Bank of Cyprus and the European Union".