It's unfair to only blame the Cypriot leadership.
"bank customers would pay a levy of 6.75% or 10% on their bank deposits... The EU and IMF have demanded the levy in return for a 10bn-euro ($13bn; £8.6bn) bank bailout." [1]
We don't really know which individual came up with the idea... but the EU were okay with the original plan to take money from those with <100k as part of a bailout, as long as the Cypriots got it passed locally as a "tax" to avoid any potential legal issues with the EU directive on protecting deposits.