14 May 2019

Tanzania, Cyprus Discuss Payment of FBME Bank Depositors

Dodoma — Tanzania is holding talks with Cyprus with a view to ensuring that depositors with the FBME Bank are paid their money.

In May 2017, the Bank of Tanzania (BoT) announced that it was shutting down FBME and revoking its banking licence following allegations by the US authorities that it was helping finance terrorism.

Established in 2003 as Federal Bank of the Middle East in Cyprus, FBME - which had its headquarters in Tanzania and majority of its operations in Cyprus - was accused in the US of, among other things, money laundering and facilitating the payment of thousands of dollars from a financier of the Lebanon's Hezbollah Islamist militants.

Following the accusations, FBME Bank was placed under the management of the BoT in 2014 before the revocation of its licence in 2017.

Speaking in Parliament yesterday, the deputy minister of Finance and Planning, Dr Ashatu Kijaji, said the depositors with the bank will have their money refunded as soon as discussions between Tanzania and Cyprus are finalised.

She told The Citizen at Parliament grounds that the talks between experts from Tanzania and their Cypriot counterparts on the best modality to pay the money were still ongoing.

"Just like what I said in Parliament, we are discussing with our Cypriot counterparts... Upon completion of the discussions the deposit insurance boards of the two countries will eventually pay the depositors," she said.

Dr Kijaji first spoke about the issue when responding to Members of Parliament (MPs) in the debating chamber who demanded that the government immediately pay all those who had deposited their money in FBME Bank.

It all started after Special Seat MP Asha Abdallah Juma (CCM) asked the government what steps the latter was taking to help people get back their money. The government's response to the question did not please some MPs who stood up and asked supplementary questions.

Among these were Mtama MP Nape Nnauye (CCM), Magogoni MP Suleiman Ally Yusuph (CCM) and Mpendae MP Salim Turky (CCM). Mr Nnauye said there were reports that the government had been taken to court by FBME Bank customers, claims that Dr Kijaji rejected.

She said it was the Central Bank of Cyprus, which took them to the court while assuring the MPs that everything went well.

"On April 5, 2019, the two governments met and held a discussion on the customers' rights and the process of paying them is on track," she said.

Dr Kijaji said 90 per cent of the bank customers deposited less than Sh1.5 million while only 10 per cent deposited more than that.

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