CBS approves closure of SBM Bank (Seychelles) Limited | 01 August 2020
The request, received by CBS on Monday July 13, 2020, was approved by the CBS board on Thursday July 30, 2020. This is in accordance with Part I of Schedule 2 of the Financial Institutions Act, 2004.
CBS governor Caroline Abel, Seychelles Bankers Association chairperson Philip Moustache, the director of the Financial Surveillance Division Aaron Leong-Pon and the senior market conduct analyst, financial inclusion and market conduct division Begitta Vital, met with the press yesterday at the Central Bank to give more details about this closure.
The SBM Group has said that the decision to close down its business in Seychelles forms part of its revised strategy following a review of the operations and performance of its subsidiaries in countries where it is present, while also considering the potential impact of the Covid-19 pandemic.
“SBM bank (Seychelles) Limited, a subsidiary of the Mauritian financial group, SBM Holdings Limited – became operational on August 12, 2019. The Bank was still in its early stage of development and with the current economic situation, the SBM Holdings Limited decided to close its branch in Seychelles. Albeit unfortunate, we had to take this decision but we are making sure that all necessary arrangements are being made for the clients to make other arrangements within a reasonable delay. I also met with the three Seychellois staff Thursday afternoon and has advised the bank to undertake necessary dialogue with its staff to ensure their fair treatment and provision of a compensation package as per the Seychelles Employment Act, in consultation with the ministry responsible for employment,” noted Governor Abel.
Governor Abel also noted that if the bank completes all the necessary process, SBM (Seychelles) Limited will hand over its licence by December 18, 2020. She also clarified that CBS and SBM (Seychelles) have agreed on specific terms for the transfer of funds from Seychelles in order not to destabilise the Seychelles economy.
The decision has already been communicated to SBMBS, which is required to produce a notice of closure. The notice shall be published in the Official Gazette and a local newspaper, and submitted to the Registrar of Companies within 14 days of being notified of CBS’ decision. The notice shall also be sent by registered post to all customers, depositors, beneficial owners, other creditors, safe deposit box lessees, owners of funds or property held by the financial institution as a fiduciary or on hire, loan, deposit or pledge and shareholders, within 30 days of being notified of CBS’ decision.
Mr Leong-Pon gave a detailed presentation on the bank itself and how clients will have to proceed. “Currently the bank has 144 depositors with a total deposit of R3,249,541.56 and employs three Seychellois and 1 expatriate staff. Following CBS’ approval of the voluntary closure, SBMBS shall not be accepting any new business as from today. The bank will only be open to undertake the necessary winding up process, which includes repaying all depositors and other creditors in respect of its operations in Seychelles,” he explained.
As regulator of the country’s banking sector, CBS is working in close collaboration with the bank to ensure that the interest of its customers and the public is safeguarded.
CBS would also like to affirm that SBMBS is fully solvent and has sufficient liquidity to honour its obligation towards all depositors and repay all debts.
Information for clients and the public
Ms Vital advised all account holders to use electronic transfer facilities available, to move their funds to accounts held with other commercial banks.
“To facilitate this process, SBMBS has agreed to waive all charges associated with the transfer of funds and other transactions, as well as closure of accounts. Clients opting for cash will be allowed to withdraw up to R25,000.
SBMBS’ clients are being reassured that they have sufficient time, until October 30, 2020, to undertake the necessary formalities.
CBS met with the Seychelles Bankers Association (SBA) yesterday to engage with the other commercial banks and the Seychelles Credit Union (SCU) to facilitate the process for those needing to open new bank accounts, subject to the banks’ undertaking of their due diligence process.
With regards to loans and other credit facilities, SBMBS will be informing clients of arrangements being made, or the various options available, for them to repay or transfer their debts.
Ms Vital also noted that the public is also being advised to refrain from issuing and accepting cheques related to SBMBS’ accounts as from tomorrow. However, CBS, commercial banks and SCU will continue to accept valid cheques up to October 30, 2020. In the event that the issuer of the cheque has already closed his/her account with SBMBS, the individual or company to whom the cheque is made payable, should contact the person to make provisions for them to be paid.
After August, clients will have to make arrangements for their salaries or any other regular income, including financial assistance such as the Financial Assistance For Job Retention Scheme (FA4JR), the Seychelles Employee Transition Scheme (Sets), or Agency for Social Protection benefits to be paid into another bank account with another bank or SCU. Alternative arrangements also have to be made for other planned payments, such as standing orders.
CBS intends for all of the above to be effected in a timely manner, by December 18, 2020, which is the tentative date set for the final revocation of SBMBS’ licence and subsequent ceasing of operation.
Customers may contact CBS on 4282000 and choose line 3 or email firstname.lastname@example.org with regard to queries, complaints or clarifications pertaining to the closure. SBMBS has also made necessary arrangements to ensure that all queries directed to the bank are appropriately addressed, and can be contacted on 4303356.
To ensure transparency and proper management of the process, SBMBS, upon request of CBS, is in the process of appointing a supervising agent that will be tasked with overseeing the winding up of the bank.
Mr Moustache seized the opportunity to reassure the depositors about the financial strength of the bank. “All the clients will receive back their money and they have to follow the instructions given by the CBS. We would recommend that the clients start the process of opening another account with other banks so that their money can be transferred. The Seychelles Bankers Association wants to reassure the public that all the other banks are ready to assist the clients of SBM and we want to reassure the public that this closure does not have any effect on other banks and they are financially stable.”
The CBS would like to reassure the public that other financial institutions and the overall banking sector is financially sound and stable, and that the closure of SBMBS will have minimal impact on the banking sector. In line with its commitment to transparency, CBS will ensure that the general public is kept abreast of developments pertaining to the closure of SBMBS.