The management of Lebanese owned FBME Bank has been taken over by Bank of Tanzania (BoT), to secure local clients savings and smooth running of the troubled bank.
In a statement issue in the city on Friday, BoT said following management takeover of FBME in Cyprus where it transacts about 90 per cent of its business, the Central Bank has decided to take over the foreign bank to ensure stability.
“In view of the decision by the Central Bank of Cyprus (CBC) to takeover FBME Bank’s branch in Cyprus and the effects these developments may have on the banking system in Tanzania, the general public is hereby notified that Bank of Tanzania, in compliance with provisions of Section 56(1)(g) (iii) of the Banking and Financial Institutions Act, 2006, has taken over the management of FBME Bank Tanzania effective 24th July, 2014,” the BoT statement said in part.
CBC took over FBME management last week immediately after United States Treasury accused the Lebanese owned bank of engaging in money laundering activities. Last Monday, CBC started looking for buyers to take over branches of Tanzania-based bank FBME.
Government spokesman Nicos Christodoulides said: “The Central Bank of Cyprus, as supervisory authority, recommended resolution measures … relating to the sale of operations of FBME Bank Ltd., to protect depositors,” adding that the aboveactions demonstrate the commitment of the independent institutions of the Republic of Cyprus to safeguard financial stability.
FBME, whose twin branches on the island are estimated to hold 1.7 billion euros in deposits, denies all charges of wrongdoing and has challenged Washington’s allegations.
In a statement issued late Monday, the CBC said: “The resolution authority has issued a decree, under the powers conferred to it … which places the branch of FBME Bank in Cyprus under resolution.”
It said the aim was to sell the assets of the two local branches of FBME, after it froze them Friday. BoT Governor Professor Benno Ndulu assured local depositors that all was well at the Dar es Salaam based bank which is the biggest in terms of total assets and deposits according to Serengeti Advisers 2013 Banking Survey.
Along with CRDB Bank Plc and NMB Bank Plc, FBME has 48 per cent of all assets in the country’s banking industry although it has only three branches in Dar es Salaam, Arusha and Mwanza.
Last year BoT and Treasury’s Financial Intelligence Unit (FIU) launched an investigations against the bank following a suspicious 10 million euros (over 22.4bn/-) transaction by an Italian politician. Findings of the investigation are yet to be made public.
Originally published on Daily News Tanzania.
