FBME Bank allowed limited activities; Clients can access funds with daily limit thru cheques only

FBME Bank clients can only access their funds through cheques with a daily limit of €10,000, a special administrator said on Monday, because the branch’s cash transfer system has been shut down by the holding company in Tanzania.

The Central Bank (CBC) took over administration of FBME in July, following a US Treasury report describing the lender as a “primary money laundering concern”.

FBME, headquartered in Tanzania, had denied the allegations, saying the US Treasury had compiled the report without its input.

The CBC subsequently appointed an administrator for FBME Cyprus. The regulator said it was
selling the branch to protect depositors and prevent contagion after correspondent banks froze and/or closed the branch’s US dollar accounts and have suspended transfers on behalf of the branch.

However, a month and half later, account holders are complaining that transactions still remain barred.

On Monday, special administrator Dinos Christofides said customers can access their funds by requesting a cheque drawn to their name.

“At the moment, only cheques drawn in euros are available with a daily limit of €10,000, non-cumulative, per customer. This service is available with immediate effect and will continue to be assessed with the intention of allowing larger amounts on a daily basis,” Christofides said in a statement.

The reason was because the lender’s SWIFT system of carrying out bank transactions “was shut down by the statutory manager of FBME Bank in Tanzania”.

And this despite establishing all the procedures necessary to be able to start following the long weekend of August 15.

“Without a SWIFT system and proper correspondent banks, the branch is unfortunately not able to implement payment transactions and provide its customers full access to their funds,” the statement said.

Christofides said the US Treasury’s announcement on July 17, led to FBME being formally or informally cast out by a number of domestic and foreign institutions and banks, in different countries, as well as other crucial providers of essential banking and other financial services.

He said that his focus since his appointment on July 21 was to liaise with domestic and foreign institutions, as well as providers of banking and other financial services, “to improve the ability of the branch to commence successful operations the soonest possible.”

“I gave instructions in the week commencing August 11 for the branch to commence servicing customer instructions, domestically and abroad, up to an initial limit of €10,000 per customer per day,” Christofides wrote.

But that did not work because the SWIFT was shut down.