The owners of FBME Limited, the holding company of FBME Cyprus branch, have welcomed a partial unblocking of accounts, but said Cyprus authorities could be doing a lot more to ease depositors’ access to funds.
“A start has been made perhaps, but there are huge questions still unanswered,” read a statement released yesterday.
It was referring to a recent announcement by the special administrator, appointed by the Central Bank. The administrator said FBME Bank clients would be able to access their funds only through cheques with a daily limit of €10,000, because the branch’s cash transfer system had been shut down by the holding company in Tanzania.
FBME Limited asked why this process had taken so long, given that resolution measures have been in place for six weeks “during which there have been ample funds available for depositors.” Moreover, why has an amount of only €10,000 a day been mandated? FBME has $1.7 billion-worth of available liquidity at present so there are ample funds to meet demand. Finally, why have these arrangements been set up with just one other bank – the Bank of Cyprus?”
In their statement, FBME’s owners went on to claim that only some depositors have been granted limited access to their funds, and wondered whether this action is not discriminatory.
“Was the administrator’s announcement mostly motivated by PR concerns aimed at relieving the climate of criticism, rather than a real contribution aimed at returning the bank to normal operations? FBME Limited invites the special administrator to make public a road map for such an orderly return, and will participate constructively in the process,” the statement added.
The Central Bank here took over administration of FBME in July, following a US Treasury report describing the lender as a ‘primary money laundering concern’.
According to FBME’s owners, the Central Bank on July 21 announced its decision to take over the Cyprus branch in order to sell it. The special administrator took over on July 22.
“So there were four weeks between the onset of Resolution and the termination of the SWIFT service on August 18. Why didn’t transactions commence early in this period? The SWIFT lines were taken down by the statutory manager only when there was an attempt by the special administrator to have FBME deposits held by correspondent banks abroad moved to the Central Bank of Cyprus. Quite rightly, this measure was questioned.”
FBME’s owners go on to criticize financial authorities of “hiding behind the fiction that there are no correspondent banks, while we know there are banks willing to act in this capacity, as we have repeatedly stated.”
The Central Bank had said the chief reason it took control of FBME Cyprus was to protect depositors after correspondent banks refused to do business. But FBME’s owners counter that this applies only to correspondent banks dealing in accounts in US dollars, not those with accounts in euro.