Businesses up in arms over Satabank freeze, banks extend onboarding invitation

Businesses are being given no information from the shuttered Satabank, after accounts were frozen on order of the Maltese financial regulator and customers left with no information on the fate of their savings. 

In a hard-hitting statement, the Chamber of SMEs (GRTU) complained of the “grave situation” despite being in agreement with the actions of the MFSA at taking immediate action on the bank. 

“Apart from the fact that this is hitting Malta’s reputation very hard and many businesses that invested in Malta have told the GRTU they ‘will not look at Malta ever again’, there is a level of unfairness where the good is being punished with the bad,” the GRTU said. 

Financial services regulator issues Q&A statement for Satabank account holders

“There are genuine businesses banking with Satabank because of their superior technology and because other banks are too traditional and slow to accept their innovative investments. It was after all a Malta-licensed bank. These businesses have had their funds frozen, they are unable to pay their employees’ wages, rents, fiscal contributions, and send or receive any money. Hundreds of businesses are unable to trade. The level of pressure and stress these people are suffering is uncalled for.” 

GRTU said it wanted the MFSA and finance minister, together with Satabank’s administrators, to take responsibility. “Everyone is shifting responsibility and hiding behind the powers conferred by law but they themselves are making matters worse. Immediate actions are required to issue procedures for handling these people and their funds. Who has to pay will pay, but who doesn’t should not be treated as collateral damage.” 

The Malta Bankers’ Association (MBA) said it had told the MFSA there was a firm resolve to support the integrity of the financial system, and that Satabank clients could contact MBA member banks to see if they are willing to on-board their business and accept their custom. 

“The process of Satabank account-holders enquiring and looking for new bank relationships has been in motion for some time. It must be underlined that a bank’s duty to open even a payment account with basic features for an individual, comes with commensurate obligations, also on the part of the customer, to help the bank understand well what relationship is being on-boarded, including information about the source of funds,” the MBA said. 

“The requirement to undertake customer due diligence and monitor account conduct is a basic precept in international and local regulation, irrespective of the nationality of the customer. Where these responsibilities are not carried out, the consequences can be serious, far-reaching and banks may risk having their activities curtailed or terminated. This has regrettably been the case in a number of instances locally, including the latest Satabank developments, which has caused damage to Malta’s reputation as a leading jurisdiction for financial services.” 

The Malta Financial Services Authority has directed the bank Satabank to stop accepting further deposits into its customers’ current accounts and to not accept any new customers.

The financial watchdog had earlier this week appointed Ernst and Young Ltd (EY) as a competent person to advise and monitor Satabank in the proper conduct of its business.

The MFSA has now also directed the bank to stop effecting or processing any withdrawal or outward transfers from any accounts held by the bank, and to stop effecting any transfer, sale, placement or any other movement of the bank’s or customers’ assets.

Satabank was his with a €60,500 fine in July after it was found to be in breach of risk management laws. The bank faced an examination of its compliance with anti-money laundering and terrorist financing laws after an FIAU and MFSA inspection of its client files. Prior to the bank gaining its licence in Malta, Satabank’s Bulgarian co-owner Christo Georgiev ran an e-money business in Luxembourg. The group the bank forms part of voluntarily surrendered its electronic money institution licence issued by Luxembourg, after Satabank was given its licence in Malta.