FBME accuses CBC of protecting itself, not depositors

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FBME accuses CBC of protecting itself, not...
 © In-Cyprus 2020
The game of cat and mouse between Tanzanian lender FBME and the Central Bank of Cyprus (CBC) continued over the weekend, with accusations and counter-accusations flying back and forth.

FBME Bank on Sunday accused the Central Bank of Cyprus (CBC) of initiating the deposit guarantee scheme in a bid to demonstrate that it had fulfilled its duties to depositors “and evade further exposure for misconduct”.

Meanwhile, on Saturday, CBC said in a statement that according to its findings, the Cyprus Branch of FBME Bank Ltd – at present does not look capable of returning deposits to customers for reasons which are directly related to its financial situation “and believes that it will not be able to do so in the near future, has proceeded to the activation of the Deposit Guarantee Fund for Banks and will pay compensation to the beneficiaries of FBME BANK Ltd-Cyprus Branch”.

However, FBME strenuously denied these claims and accused the CBC of trying to protect itself and not FBME depositors.

“The funds that CBC rely on have been in their possession for more than a year and the circumstances that would have permitted depositors to access the Deposit Protection Scheme have existed for a considerable time,” FBME said. “It is incorrectly stated that the economic condition of FBME is the reason for activation. The truth is that funds are available but the CBC’s mishandling of the situation has starved depositors of access to funds.”

Meanwhile, on 31 March, the Special Administrator of FBME’s Cyprus Branch, who was appointed by CBC in January, delivered signed redundancy notices to 136 FBME staff in Cyprus, which made up most of the bank’s employees on the island.

This mass staff dismissal came after a ruling on 25 March, FinCEN, which is part of the US Treasury Department, reaffirming its July 2014 decision to prohibit US banks from opening or maintaining correspondent accounts of or on behalf of FBME, which it described as a...

This article was automatically added to our system 11-4-2016

FBME accuses CBC of protecting itself, not depositors

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