* Cyprus to scrap capital controls on Monday
* Island sees minimal risk from Greek crisis
* Confidence restored in bank system-president (Releads, updates)
By Michele Kambas
NICOSIA, April 3 (Reuters) - Cyprus will lift all capital controls on Monday and President Nicos Anastasiades voiced confidence that its banking system, forced into a chaotic bailout in 2013, is now immune to the crisis in neighbouring Greece.
The Mediterranean island nation became the first and, to date, the only euro zone country to impose capital controls, when its banking system imploded in 2013 and depositors pulled out their funds.
Cyprus was forced to shut one bank and seize deposits in another to recapitalise a system badly exposed to Greece’s debt crisis.
Asked whether Friday’s announcement on ending the controls was a Cypriot ‘vote of confidence’ in Athens’ current bailout talks with Brussels, Anastasiades answered: “It is a form of a vote of confidence because we want to believe further crisis will be averted.”
He added: “It is a vote of confidence in our banking system, which, now fully independent of Greek banking institutions, can move forward.”
Cypriot banks chalked up about 4.5 billion euros, or 25 percent of the island’s gross domestic product, in losses from their holdings of Greek sovereign bonds written down in late 2011.
A condition for lenders agreeing to give Cyprus 10 billion euros in aid in 2013 was that the banks sell off their branches in Greece — then billed as an attempt to ‘ring fence’ the Greek economy from the Cypriot crisis.
Asked if authorities had assessed the possibility of Greece leaving the euro zone, even by default, and its impact, Anastasiades reiterated that he did not want to contemplate the possibility.
“But because we have a Cypriot saying that ‘wise kids cook before they are hungry’ ... I want to assure you that all exercises on paper have been done, for any eventuality.
“Firstly there is no large risk any more to the Cypriot economy. Measures are planned so that whatever minimal (risk) remaining is mitigated even further,” he said, without elaborating.
The last remaining capital control, included in a finance ministry decree last month, required authorities’ approval for businesses sending large remittances overseas, and individual travellers moving more than 10,000 euros ($11,000) out of the country. ($1 = 0.9185 euros) (Reporting by Michele Kambas; Editing by Ruth Pitchford)