Satabank confirms suspension of outward USD payments related to correspondent banking
Satabank has confirmed that the “temporary” suspension of outward payments in US DollarS was related to the correspondent bank issue.
American banks have been limiting their networks to the United States and cutting down on channels to the EU in a bid to render themselves only liable to intra-US transactions. This has affected Malta as a number of banks have lost their correspondent banking agreements. It has been reported that BOV has lost its relationships with two major US banks while HSBC Malta has also been affected but can still make use of the group network. Correspondent Banks are necessary for commercial transactions with foreign companies and also for local banks to trade in the dollar.
Last week, clients of Satabank were informed of a temporary suspension of processing of outward bank transfers in the US dollar currency. The banks said that outward transfers in other currencies supported by Satabank initiated from client accounts would still be processed. So would inward transfers, internal transfers and transfers between own accounts in USD
Replying to questions sent by this newspaper, the Satabank management said: “As mentioned in the bank’s notice issued on 16 November 2016, Satabank plc temporarily suspended the USD outward payments. Satabank plc acted prudently following developments at one of the USD correspondent banks it uses. The latter developments are occurring in USD clearing in several other jurisdictions.”
The bank did not say whether the suspension is still in place.
The PN claimed last week that the Prime Minister had flown to New York specifically to salvage failing correspondent banking relationships. It also claimed that one of the reasons behind the breakdown of correspondent banking agreements was the tarnishing of Malta’s reputation as a consequence of the Panama Papers scandal.
The Office of the Prime Minister said the main aim of the visit was to attract new investment to Malta but acknowledged that the Prime Minister’s delegation had made an effort to attract more banks that offer corresponding banking to Malta. The OPM insisted, however, that this had nothing to do with reputation or Panama Papers and said these developments were a result of the policies imposed on US banks in recent years which had nothing to do with Malta. “This is an issue that has been ongoing since the previous administration. Efforts by that administration did not yield any results. This government is working to obtain results.”