It’s official: Tanzania’s Central Bank revokes Mbinga Community Bank licence

Mbinga Community Bank becomes the second bank in Tanzania today revoked its banking licence, after  the BoT done the same on Monday this week to FBME Bank which was accused by the U.S. government on large-scale money laundering.

It’s official: Tanzania’s Central Bank revokes Mbinga Community Bank licence

Mbinga Community Bank becomes the second bank in Tanzania today revoked its banking licence, after  the BoT done the same on Monday this week to FBME Bank which was accused by the U.S. government on large-scale money laundering.

12 May 2017 Friday 16:27
It’s official: Tanzania’s Central Bank revokes Mbinga Community Bank licence

By Prosper Makene

THE Tanzania’s Central Bank has today revoked the licence for Mbinga Community Bank following the bank’s capital fell below the required levels. Mbinga Community Bank becomes the second bank in Tanzania today revoked its banking licence, after the BoT done the same on Monday this week to FBME Bank which was accused by the U.S. government on large-scale money laundering.

The central bank’s statement said: “We have decided to take possessing of the bank and discontinue its operations as well as place it under compulsory liquidation.”

The Central Bank has also appointed the Deposit Insurance Board (DIB) as the liquidator effectively from tomorrow.

The measure was taken upon determination by BoT that the bank was critically undercapitalized and insolvent hence violating the requirements of the Banking and Financial Institution Act of 2006 and its regulations. The Act requires the banking capital not to follow below 15bn/-.

However, on Monday this week, Tanzania's central bank revoked the business licence of FBME Bank and placed it under liquidation after accused by the U.S. government on large-scale money laundering.

The central bank took over the management of FBME Bank in July 2014 following a report from the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) describing the bank as a "primary money laundering concern."

The Tanzanian-registered bank mounted a legal challenge against the allegations, but a U.S. court ruled in favour of FinCEN in April, allowing it to shut the bank out of accessing the U.S. financial system.

The decision also paved the way for the central bank to revoke the bank's license, officials said.

"The Bank of Tanzania has discontinued all banking operations of FBME Bank Ltd, revoked its banking business license and placed it under liquidation," the central bank said in a statement.

It said it had appointed the Deposit Insurance Board as a liquidator.

FBME, which according to its website specialises in cross-border transactions, commercial trading and foreign exchange services, did not respond immediately to a request for comment.

FBME Bank is registered in the East African country but has been conducting most of its business operations elsewhere, notably in Cyprus.

Azania Post

Updated: 12.05.2017 17:17
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