Mauritius | Finances

July 16, 2012

Alleged Mistreatment of Records: The Central Bank Survey of MCB

The Bank of Mauritius has initiated an investigation of the Mauritius Commercial Bank (MCB). A customer, whose company was put into "receivership", complained of the treatment of his case. The MCB replies that it will cooperate with the Central Bank.

In a letter dated July 11, the Bank of Mauritius (BoM) responds to the Director of Small and Medium Enterprise (SME) has opened an investigation into alleged abuse of his case by a File Manager the MCB. 

" Complaint against The Mauritius Commercial Bank Ltd : We refer to your letter dated 06 July 2012 with regard to the above subject matter and write to inform you that the matter has been taken up with the Mauritius Commercial Bank Ltd?," says letter. The MCB, in response to the letter of the SME, wrote: " Please note that the File Manager no longer works at MCB. If BoM has queries, we will obviously answer them and cooperate fully." 

It all starts with the loan application of Rs 2.5 million SMEs in 2008 that the MCB, through the leasing company CIM, to acquire a fleet of cars to be rented out. The file is assigned to a File Manager and in 2009; this company decides to enter into partnership with another company, because of the economic crisis. " We had a discussion with all our financial partners about a request to consider the transfer of loan facilities together with the assets from my company to the new incorporated company to which the leasing companies agreed?", it said in the complaint made by this SMEs in the Central Bank. 

An application is thus made to the National Transport Authority (NTA) for the transfer of vehicles on behalf of the new entity, which request is approved. The problem will come from the side of the MCB, who refuses to transfer vehicles to this new company. The negotiations will last for months, with meetings between the File Manager and Director of the SMEs. 

This advance Director, in his correspondence, he accepts that there are conditions attached to express her loan, as for the non-repayment, and that the MCB has the legal right to recover its capital and administrative costs. However, he adds that " the equipment purchased on loan by the company could not generate revenue due to the fact that they could not be operated without license, since same were transferred to the new company." 

Lack of communication 

What gripe manager company is the lack of communication of the MCB File Manager from its folder. The vehicles being in possession of the bank, they could not generate cash flow through their rent. Meanwhile, successive meetings, correspondence from the businessman is sent to the File Manager to find out where things are. The letters date from January 2009 to April 2010. 

"I deplore the fact that the File Manager did not inform me of any decision of the bank not to give me a loan to pay the debts of my first company, of especially as the File Manager in the presence of a recovery plan, and not giving me the opportunity to sell my vehicle to repay my debts to the MCB. Instead, they let me understand that my application is pending (abeyance). So it was not rejected. " 

He adds: " Would the bank through its File Manager have advised me between 2009 to 2010 that MCB is not in a position to entertain my request, it would have given me time to seek for other solutions. Would the bank through its File Manager have advised me between 2010 to 2011 to proceed with disposal of assets, it would have been in my favour to avoid having a bigger shortfall on capital while disposing of assets to reimburse the bank.?" 

Things started going wrong with the decision of the MCB to appoint a Receiver Manager, due to non repayment of the loan from this company: " Instead the bank had preferred to appoint a Receiver Manager as per loan agreement signed, without thinking it wise to consult with the File Manager the reasons why we could not repay the bank from the company’s revenue, and why we could not even reimburse the bank through disposal of vehicles  " 

He then filed a complaint in court business against the MCB and approached the Central Bank so that it opens an investigation into his case, because its File Manager has mishandled his case, which led to the liquidation of his company. He also argued that the central bank should see how to force commercial banks to follow certain rules vis-à-vis their clients.

 

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