28 July 2014

Tanzania: BoT Clears Habib African Bank of Money Laundering

LOCALLY registered Habib African Bank (HAB) Limited has no direct links with Habib Bank AG Zurich of Switzerland, which was fined 525,000 pounds sterling by Financial Service Authority of UK for engaging in money laundering.

Bank of Tanzania (BoT) spokesperson Zalia Mbeo told the 'Daily News' over the weekend that HAB is Tanzanian and has local registration with full compliance to the law.

"Habib Bank AG Zurich (HBZ) is not related to the Habib African Bank Ltd Tanzania in terms of shareholding and directorship.

Therefore, Habib Bank AG Zurich is not a parent bank of Habib African Bank in Tanzania," said Ms Mbeo in written response to the 'Daily News.'

The Swiss-based bank fined by British authorities for money laundering control failings involving 17,500 pounds sterling in 2012.

"The bank mentioned in the email is Habib Bank AG Zurich (HBZ) which was established in Switzerland in 1967. In 2012, the bank was fined by the Financial Service Authority of United Kingdom (FSA) £525,000 and money laundering reporting officer £17,500 for anti-money laundering control failings," Mbeo wrote.

Habib African Bank Limited Managing Director, Dr Hassan Rizvi, also distanced his institution with the Swissbased bank saying the two are totally different.

"We have local shareholding and are locally registered with no links with Habib Zurich Bank," said Dr Rizvi. He stressed that the names may simply be partly identical, with no direct bearing on shareholding of management while pointing out that Habib African Bank operates ethically with full compliance to local banking regulations.

Established in Tanzania in 1998, Habib African Bank belongs to the most famous, respected and trusted Habib Family who are treated as the pioneers of banking industry in the sub-continents, the local bank said on its website.

In a brief introduction of the bank, the website statement further noted that Habib Esmail, following the death of his father, joined a leading dealer in metals, copper and brass and subsequently became a junior partner in the firm.

Mr Esmail went on to found his own business of financing traders and introduced merchant banking under the name of Habib & Sons in 1920.

Upon the death of Esmail in 1931, his two sons, Dawood and Mohamed Ali consolidated their father's business and took it to new heights by extending to new areas.

Habib Bank Limited, which later on turned out to be the flagship of Habib family's business, was founded in Bombay, India, in 1941 and later relocated its head office to Karachi before the creation of the state of Pakistan.

"Carrying on the mantle from Dawood and Mohamed Ali, their sons shaped the Habib Bank as one of the largest commercial banks in South Asia with 875 branches in Pakistan and 44 branches overseas," the bank said in the statement.

In January 1974 following nationalisation of all domestic banks by Pakistan authorities, the group founded its operations in the UK in 1984 under a name Habibsons Bank Limited which expanded its network in the UK and opened a branch in Zurich, Switzerland, the local bank's website noted.


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