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Central Bank of Namibia seizes control of SME Bank

Namibia WikimediaThe Bank of Namibia has assumed control of SME Bank after discovering unusual and “unsound” investments made by the firm in South Africa.

Namibia’s central bank picked up on suspicious transfers out of the country from SME Bank earlier in the year. When it questioned officials they gave “unsatisfactory” answers. The total figure involved is still being calculated by the central bank, but is believed to be in the region of $14 million.

SME Bank’s CEO, who is also the Chairperson of the Banker’s Association of Namibia, has been summarily dismissed as part of the process. “The board was supposed to make sure the bank is managed properly,” says Ipumbu Shiimi, Governor of the Bank of Namibia. The central bank, he adds, was fully within its rights to seize control in the circumstances. “Once the assessment of the investment portfolio is completed, and the investments are secured and the potential risk to its stability is mitigated, the institution will be handed over to its shareholders.”

SME Bank has had a rocky history with the central bank and the government – in 2014 it was faced with mounting losses, absent audits and unknown technology partners siphoning funds. The bank was also rumoured to have run out of cash only months after launching. It hasn’t paid taxes since 2012.

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