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The special administrator appointed by the Central Bank of Cyprus informed most of the staff of FBME Bank, which had its licence revoked in December, that their employment will be terminated effective on April 1, a source said.

“Since the bank’s license has been revoked and the decision of Financial Crimes Enforcement Network was issued, expenses have to be reduced to a minimum,” the source familiar with the matter said.

On March 25, FinCEN, a unit of the U.S. treasury, reaffirmed its decision to prohibit U.S. banks from opening or maintaining correspondent accounts of or on behalf of FBME, which it described as a financial institution “of primary money laundering concern”.

Of a total 161 staff members, “around 30 will continue working for the bank provided they want to”, in order to keep “the status quo unchanged” in anticipation of the court’s ruling on the central bank’s application to liquidate the bank and appoint a “criminal liquidator,” the source added.

Affected workers were already paid their salary for March and will receive “any other benefits they were entitled to according to the law,” the source added.
“It is unlikely, following FinCEN’s decision, that the bank will operate again and resume its operations as its situation is irreversible,” the source said.

The central bank appointed in July 2014 an administrator at FBME. The bank operated as a subsidiary of Tanzania’s FBME Bank.

By Stelios Orphanides