By Business Insider Reporter
The Deposit Insurance Board (DIB) has announced a third round of compensation for former FBME Bank customers in Tanzania, marking a major step in the long-running liquidation process of the defunct lender.
The latest payout of 30 percent will be issued to creditors with deposits exceeding TSh 1.5 million, bringing the total amount paid to local claimants to 85 percent of their verified claims.
The DIB Director General, Isack Kihwili, said in a statement on the development that the decision follows a new assessment of funds collected so far, with the Creditors Committee having approved the disbursement.
According to DIB’s latest update, Tanzania has 1,414 verified creditors with total claims amounting to TSh 35.2 billion. In contrast, FBME’s international creditors number 866, holding significantly larger claims valued at TSh 308.22 billion.
The figures highlight the wide disparity between domestic and foreign exposures in the bank’s collapse, underscoring the scale and complexity of the ongoing liquidation process.
The bank’s Cyprus branch accounts for another 5,480 clients, with claims amounting to EUR 1.25 billion.
“Future payouts will depend on the recovery of additional resources, particularly funds still frozen by the US Financial Crimes Enforcement Network (FinCEN),” Mr Kihwili noted in the statement.
“These frozen assets have been one of the main factors delaying the compensation process,” he explained.
FBME Bank, once headquartered in Tanzania with operations stretching to Cyprus, was placed under regulatory scrutiny after international investigations linked the bank to serious compliance breaches.
In 2014, FinCEN accused FBME of facilitating financial transactions associated with money laundering and other illicit activities. This triggered restrictions by global banks, severely limiting FBME’s ability to operate.
Following the findings and compliance failures, the Bank of Tanzania (BoT) moved in and revoked FBME’s banking license in 2017, citing violations of licensing conditions and risks posed to the integrity of the domestic financial system.
BoT appointed the Deposit Insurance Board as the official liquidator.
Because FBME operated in both Tanzania and Cyprus, the liquidation has required coordination between regulators in the two countries – a process that has added complexity and extended timelines.
Disputes over asset ownership and frozen funds, particularly in the United States, have also slowed down the recovery effort.
DIB says it will continue assessing assets and making further payments once adequate funds are secured. For thousands of creditors affected by the bank’s collapse, the latest payout offers renewed assurance that the long liquidation process is gradually progressing toward resolution.
