BoT Defends Habib Bank Director

Presence of Habib Mohamed D. Habib as board member of London based Habib Bank Limited and Dar es Salaam based Habib African Bank Limited, has no legal problem.

Bank of Tanzania Governor, Professor Benno Ndulu said Mr Habib who is board chairman of the local bank and director of the London based bank in which he has controlling stakes as founder, poses no problem.

We know that he sits on the two boards but each of these banks is separate with different regulatory jurisdictions,” argued Prof Ndulu as he seeks to assure local clients that the two banks which were both founded by Habib are completely different.

Prof Ndulu told Business Standard that, “The Tanzanian based bank follows local regulations and is supervised accordingly.”

Habib Mohamed D. Habib joined Habib Bank Limited in Karachi, Pakistan in 1954 and later held a position of Joint President before moving to Switzerland in 1975 where he became General Manager and Joint President of Habib Bank AG Zurich is board Chairman of the local bank.

“A great and seasoned banker, he is the grandson of Habib Esmail, the founder of Habib family. He remained at the helm of affairs and a driving force in the unparallel growth of Habib Bank Limited before its nationalization,” Habib African Bank said on its website.

The local bank further said under directors section of the website that Habib who founded Habibsons Bank Limited in 1984 in the UK with its network extending to Zurich, Switzerland, remained its Chairman until its partnership with Habib Allied International Bank PLC in 2011.

He is also the Chairman of Habib Overseas Bank in South Africa. “Habibsons Bank is a wholly owned subsidiary of Habib Allied International Bank PLC which was incorporated in the UK in 2001. Habib Allied International Bank PLC is a subsidiary of Habib Bank Limited ,” Habibsons Bank Limited said on its website.

Bank of Tanzania and Habib African Bank have dismissed any links between the local bank and London based HBL whose subsidiary, Habib Bank AG Zurich was fined over 550,000 pounds sterling (over 1.4bn/-) in 2012 by British regulators over money laundering allegations.

The UK’s Financial Services Authority also imposed a 17,500 pounds (about 50m/- ) penalty on former Money Laundering Reporting Officer Syed Itrat Hussain for not ensuring that adequate anti-money laundering controls were in place at the institution. Central bank spokesperson, Zalia Mbeo told the Business Standard last Friday that HAB is Tanzanian and has local registration with full compliance to the law.

“Habib Bank AG Zurich is not related to the Habib African Bank Ltd Tanzania in terms of shareholding and directorship. Therefore, Habib Bank AG Zurich is not a parent bank of Habib African Bank in Tanzania,” said Ms Mbeo in written response.

“The bank mentioned in the email is Habib Bank AG Zurich which was established in Switzerland in 1967. In 2012, the bank was fined by the Financial Service Authority of United Kingdom £525,000 and money laundering reporting officer £17,500 for anti-money laundering control failings,” Mbeo wrote.

Habib African Bank Ltd Managing Director, Dr Hassan Rizvi also distanced his institution with the Swiss based bank saying the two are totally different. “We have local shareholding and are locally registered with no links with Habib Zurich Bank,” said Dr Rizvi.
He stressed that the names may simply be partly identical with no direct bearing on shareholding of management while pointing out that Habib African Bank operates ethically with full compliance to local banking regulations.

The latest development comes following US Treasury blacklisted Lebanese owned FBME Bank for its involvement in money laundering. The Central Bank has placed FBME under its direct management control naming former National Bank of Commerce Managing Director, Lawrence Mafuru as Statutory Manager.

“Considering the potential effect of the decision taken by Central Bank of Cyprus to take over FBME’s Bank branch in Cyprus which may likely bring into the banking system in Tanzania, and consistent with the provisions of of section 56(1)(g)(iii) of the Banking and Financial Institutions Act 2006, the Bank of Tanzania has taken over the management of FBME Tanzania Limited effective 24th July 2014,” BoT said in a statement last week.

Originally from DailyPress

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