Updated 5.09pm with new decision by the MFSA
The Malta Financial Services Authority has decided to start a controlled release of customer deposits at Satabank, bringing some relief to customers, many of them foreigners, who saw access to their funds blocked since Saturday.
"The Authority has directed the Competent Person to initiate a controlled process for the return of customer deposits over a period of time. The release of funds will be subject to certain controls and checks following which, funds may be transferred," the MFSA said on Wednesday.
"This process will require Satabank customers to verify their identity and provide additional information and details of another account with a credit or payment institution in an EU/EEA jurisdiction in the same name as the existing account at Satabank to which monies can be transferred."
When customers do not have an alternative account in an EU/EEA jurisdiction, they will be encouraged to set one up as soon as possible.
Further guidance will be provided on the bank’s website as soon as practical, although this is likely to take several weeks, the authority said, adding that the bank continues to meet all capital and liquidity requirements.
Accounts at Satabank, a small international bank, were effectively frozen by the MFSA on Saturday, when the MFSA also announced that Ernst and Young (EY) have been appointed to administer the bank’s assets in the best interests of depositors.
Times of Malta had reported earlier that a joint inspection and audit by the MFSA and FIAU found shortcomings in the bank’s anti-money laundering procedures.
Satabank depositors have since then taken to physically waiting outside its St Julian’s headquarters in a desperate bid to find out what will happen to their money.
Earlier on Wednesday afternoon, the bank said in a statement customers had "read only" access to their online account balances.
Speaking to the Times of Malta outside Satabank’s office, a young Italian businessman who owns an IT start-up said he had not slept for three days after hearing the news.
“I have done nothing wrong. If the bank has internal problems, it is not fair that ordinary clients are made to suffer,” the businessman, who preferred to remain anonymous, said.
“My account is blocked. I cannot receive or send any payments or even access internet banking.
“My business is only surviving because I have explained the situation to my clients and they have been understanding. I can’t even pay for food at the moment.”
In reply to questions by Times of Malta, a spokesman for the Malta Financial Services Authority said the regulator was “acutely aware” that several Satabank clients were trying to access and use their funds, particularly companies that needed money for operational reasons.
“The MFSA is actively looking into the matter to find a practical solution to minimise the inconvenience as much as possible,” he said.
E-money accounts, one of the products offered by Satabank, were not covered by the depositor compensation scheme, the spokesman said.
The Italian businessman who spoke to the newspaper said Satabank was the only bank willing to open an account for him.
“It has become impossible for foreigners to open a bank account in Malta, even if they run a clean and legitimate business”, he said.
An Italian businessman said his ordeal with Satabank would probably lead him to relocate his start-up to another country.
An Israeli entrepreneur, who claimed to have over €1 million in a corporate account for a company he runs in the gaming industry, said this experience with Satabank had likely killed his business.
“I have not been able to send money to my affiliates. My business here is probably ruined,” he said while waiting restlessly outside the bank and exchanging stories with other account holders there.
A source familiar with the bank’s operations said Satabank and EY were assessing which of its clients were at the highest risk of suffering immediate financial consequences from the block on all accounts.
Satabank has been on the radar of both the MFSA and the Financial Intelligence Analysis Unit since the beginning of the year. A joint inspection by the two entities concluded that there were significant weaknesses in the bank’s anti-money laundering procedures.
One British pensioner, who told the Times of Malta he had over €300,000 in life savings deposited at the bank, said it was bizarre how the regulator made ordinary depositors suffer for the bank’s problems.
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