AIBL Folds after Eighteen Years in Offshore Banking Sector
There are new details tonight in respect of the crisis at the Atlantic International Bank Limited. We can confirm that AIBL has started a voluntary winding up and representatives from the Central Bank of Belize have been deployed to the bank to ensure that the process is smooth and clients are protected as much as possible. AIBL’s C.E.O. has resigned and the chair of the board from Honduras is in place at the bank. AIBL is the second international bank in Belize to close operations in the past ten months leaving only two banks to handle correspondent banking issues. The situation has been triggered by a multimillion U.S.-dollar land fraud over which the Federal Reserve Commission has come down on the bank. This afternoon, News Five’s Isani Cayetano sat down for a one-on-one with Central Bank Governor, Joy Grant and files the following report.
Isani Cayetano, Reporting
Atlantic International Bank Limited has commenced the process of shutting down its business as an offshore financial institution that has been operating in Belize for the past eighteen years. The decision to voluntarily wind up the company comes amid a particularly worrying state of affairs in which the Federal Trade Commission has come down hard on AIBL for its purported role in assisting and facilitating Telemarketing Sales Rule violations, in respect of the phony Sanctuary Belize real estate venture.
Joy Grant
Joy Grant, Governor, Central Bank of Belize
“The situation at AIBL is troubling. It came to our attention that the management of AIBL decided that because of a certain situation that they did not feel that they could continue in operation for much longer. We at the Central Bank, of course, because we have to protect depositors, and when we do that it’s of course protecting the financial system, decided that we would do what is called a special examination and immediately sent in four of our staff who are there to look at what is happening at the bank, provide us here at the Central Bank with data because we have to do an analysis of the data to determine what is the true position of the bank.”
For its alleged involvement in making possible countless transfers in furtherance of this real estate scam, Atlantic International Bank has been facing serious pressure from the FTC which has since mounted legal proceedings against the company.
Dean Barrow
Prime Minister Dean Barrow
“What has happened is that you can’t win that sort of a fight and to say that it was unfair doesn’t help you. They are unable, as I understand it, to sustain that campaign, the legal campaign any longer, it’s extremely costly. I gather [that] there may have been an offer from the FTC for a settlement, but the amount involved would, in any case, have killed the bank. So, as I understand it, the bank has asked the Central Bank to intervene and to assist them to wind up the institution.”
The role of Central Bank in this undertaking is to ensure that AIBL has sufficient assets to cover all liabilities as part of an intended shutdown. Central Bank Governor Joy Grant explains what the regulator would be seeking.
Joy Grant
“Look at the liquidity of the bank, look at the queues for payments, et cetera and we are doing that now.”
Isani Cayetano
“What is the extent of the involvement of Central Bank in respect to what we are coming to understand as a voluntary liquidation of this company?”
Joy Grant
“That is an interesting question because the act, the DBFIA [Domestic Banks and Financial Institutions Act], and of course the IBA [International Banking Act] talk about liquidation and there are two ways, voluntary windup or liquidation. Now in the voluntary windup what we have to do as Central Bankers is look at the figures provided to us and we have been getting figures on a weekly basis for a few months because the law says that you can only do a voluntary windup when you have enough assets to pay all liabilities.”
The termination of the company, says PM Barrow, is regrettable. Most importantly, he added, is that clients are able to withdraw the totality of their deposits.
Prime Minister Dean Barrow
“I hope that the winding up will not leave too many of their customers unable to get out the full amount of their deposits. That has to be the primary concern, apart from the fact that as I said it was a functioning bank, I thought an effectively functioning bank and it diminishes certainly our international banking climate that they now have to exit. But the immediate concern is to be sure that depositors are treated as fairly as possible.”
What is equally worrisome is the fact that this is the second offshore financial institution to be shuttered in Belize within the span of approximately ten months, albeit under different circumstances. The first was Choice Bank Limited.
Joy Grant
“Absolutely, but I want to make it clear that the two situations are completely different. But no there is always the perception as to well this is about a year for two banks. So I take this opportunity to say that this financial system is sound. We at the Central Bank will do everything in our power to make sure that the right decision is taken in every situation.”
News Five understands that former Chief Executive Officer Ricardo Pelayo has since resigned from AIBL and that the operation is presently being overseen by a chairman from Honduras. Reporting for News Five, I am Isani Cayetano.
