Cyprus courts have rejected the Cyprus Central Bank’s demand to place FBME Bank under liquidation.
The court ruled that the terms and conditions for liquidation of FBME Bank had not been met.
In his ruling, the judge said that he does not see liquidation as serving the interest of the Cyprus banking system.
“I do not believe that, after the tragic events of March 2013, that in this way the reputation of the Cyprus banking system is upheld and the public interest secured. Consequently, the Central Bank’s demand is rejected,” said the judge.
The ruling is significant for the future of FBME Bank, which is currently on life-support after Tanzania’s Central Bank revoked its banking license and placed it under liquidation just days ago.
Trouble for the depositors began in July 2014, when the Financial Crime Enforcement Network (FinCEN) of the US Treasury labelled the bank as a money laundering centre with ties to Hezbollah, the Lebanese militant group which is considered a terrorist organisation in the US and EU.
FinCEN’s report froze FBME Bank transactions in the US and led to the Central Bank of Cyprus taking action, placing the bank under special administration and subsequently resolution.
The Central Bank’s request for FBME’s liquidation had been submitted in December 2015, one year after first taking action against the bank.