Satabank has been slapped with a massive and unprecedented fine of around €3.5 million by Malta’s Financial Intelligence Analysis Unit (FIAU) for a number of breaches in regulatory and compliance areas.
Last October, the Malta Financial Services Authority (MFSA) had frozen all accounts associated with the bank, causing personal and business account holders alike to be temporarily left in limbo without access to their funds. It had ordered the bank to cease all business activity and was subject to a joint inspection by the MFSA and the FIAU after flags were raised regarding procedural shortcomings in the bank’s anti-money laundering procedures.
The MFSA had proceeded to hand over control of Satabank to auditors from EY.
Media reports detail how the police have been investigating transactions that have passed through the bank’s payment channels which could amount to billions in euros.
Of note is that it is the first time a retail and commercial bank in Malta has been subject to such action due to its activities. It is reported that the MFSA was working in tandem with the Central Bank of Malta as well as the FIAU. Each bank account held at Satabank is being closely looked at to ensure that no questionable funds leave the Paceville bank.
When the announcement of Satabank’s accounts becoming frozen was made last October, local businesses were left reeling. Merchants woke up on one faithful Monday morning in October to find that their acquiring bank had been closed overnight with very little information made publicly available.
Foreign nationals with businesses in Malta were also hit hard as they were struggling to acquire bank accounts with more traditional and mainstream banks and thus had to turn to Satabank in order to meet their banking needs.
A ‘hardship’ fund was even set up to assist businesses who lost access to acquiring services and access to funds overnight while local trade unions called on regulators to keep struggling businesses in mind.
Shortly after Satabank’s 12,000 accounts were frozen, EY was tasked with carrying out a controlled release of the bank’s customers funds, after identification and proof of funds were duly supplied.
Satabank was known for offering an online payment channel permitting small peer-to-peer payments.
In July 2018, the bank had been slapped with a €60,500 fine by the MFSA for procedural shortcomings.
Following the control of Satabank by EY, it has protested with the Malta Financial Services Tribunal for what it says are exorbitant rates it is being charged for EY’s services, amounting to some €600 per hour.