FBME challenges Central Bank’s ‘normalisation’ procedures

By Angelos Anastasiou
FBME issued a statement on Saturday questioning the Central Bank’s intentions and challenging the way it has taken control of the bank’s operations after the US Treasury described the bank 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 Central Bank (CBC) appointed an administrator for FBME Cyprus in mid-July. 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.
In its statement on Saturday the bank’s management welcomed comments by the Central Bank issued on Thursday defending its operations as “a start of a debate”. But FBME went on to raise several points it felt remain unclear.
Citing a point from the CBC’s statement, which claimed that its actions “have been geared at normalising the operations of FBME and protecting its depositors”, the bank responded that “few, if any, depositors feel themselves to have benefited from this protection – not being able to access their accounts for over five weeks has caused massive harm.”
“This is not ‘normalisation’,” FBME argued.
Further, the lender’s management claimed that the CBC’s assertion that correspondent banks refuse to transact its payments is inaccurate, as the bank had come to an understanding with some prior to its takeover by the regulator in July. FBME duly informed the Central Bank’s Special Administrator of these arrangements “prior to the end of July”, it said, but he refused to engage.
With regard to the CBC’s claim that the SWIFT payment line was interrupted by FBME’s head office, the bank admitted this was the case as of August 18, but queried why the Special Administrator failed to utilise the bank’s deposits at the CBC – some €180 million – to make the necessary payments.
“Why can’t they use these [deposits] for payments?” the bank asked. “And why are they holding onto them? Also, what happened in terms of allowing transactions in the four weeks prior to 18 August?”
Finally, FBME rejected the CBC’s claim that its owners had refused to meet, claiming that at the time of the proposed meeting “one shareholder was abroad and the other was unwell.”
“The owners are still willing and always have been keen to hold such a meeting,” the statement said. “It should be simply re-scheduled.”
FBME signed off its statement with its response to the CBC’s ban on communication with customers, correspondents and other stakeholders.
“The holding company has responded by posting its own website, which can be found on www.fbmeltd.com,” the lender said.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.