6 August 2014

Depositors should have a right to access their accounts at the Cyprus branch of FBME. Payments have been effectively blocked by the Special Administrator of the Central Bank of Cyprus, although he claims to be approving transactions. But very few have been given the go-ahead. The claim that this is due to an absence of correspondent banking arrangements, made by the Central Bank of Cyprus, is not true: there are correspondent banks.

Transactions at the head office and branches in Tanzania are operating under the supervision of the Bank of Tanzania, the host regulator but are continuing. There should be no reason why this should not apply, too, to Cyprus.
When the Special Administrator of the Central Bank of Cyprus was appointed it was said that his objective was to protect the interests of the depositors. Whatever the original intention, this is now clearly not happening – as a direct consequence of his refusal to allow transactions to be made.
FBME Bank remains a healthy bank and has more than adequate short term liquidity for its depositors. It is our understanding that the Special Resolution law as it applies to financial institutions in Cyprus is designed to apply to institutions that are defunct or facing significant liquidity issues. not healthy, well-capitalised banks such as FBME’s Cyprus branch.