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Ruler To Fully Compensate BCCI Depositors In Oman

February 16, 1992

MUSCAT, Oman (AP) _ Oman’s ruler has promised to fully repay home depositors of BCCI, the international bank that collapsed last year following allegations of widespread fraud and drug money laundering.

A leading banker said Sunday that Sultan Qaboos ordered a royal grant totaling ″several million rials″ to compensate the estimated 7,000 Omani investors in the Bank of Credit and Commerce International. One rial equals about $2.60.

″Oman is in effect one of the first countries to ensure that BCCI depositors receive 100 percent of their money back, just not 20 or 30 precent as in some other countries,″ Nooreddin Nahawi, general manager of Bank Dhofar al Omani al Fransi, which took over the BCCI operation in Oman, told The Associated Press.

Nahawi declined to disclose the exact amount of the royal grant.

An estimated 1.3 million depositors around the world risked losing their savings when BCCI, with 70 branches around the world, collapsed last year after international allegations of widespread scandal.

BCCI’s major shareholders, the Al Nahyan ruling family of Abu Dhabi, are reportedly planning compensation of between 40 percent and 80 percent for depositors in their Persian Gulf nation. They are also involved in negotiations with liquidators on a settlement plan that would pay out between 30 percent and 40 percent for other depositors.

Nahawi said BCCI customers in Oman would have access to their money deposited as of July 5, 1991, when BCCI’s Oman operation was closed. However, no interest would be paid on savings held during the closure period, he said.

Meanwhile, the Omani Central Bank said the BCCI acquisition by the Bank Dhofar al Omani al Fransi meant BCCI had ceased to exist in the sultanate.

The Central Bank also informed BCCI borrowers that their obligations, including interest up to the date of the sale, had been transferred to the new bank owners. It requested they ″cooperate in settling their debts.″

Bank Dhofar al Omani al Fransi outbid three other Omani banks - Oman Arab Bank, Bank of Muscat and Oman Corporation - to acquire BCCI and in doing so became the sultanate’s largest capitalized bank, Nahawi said.

″It was a bidding situation in which BCCI’s assets and liabilities were up for sale, and we bought them,″ he said. ″BCCI’s deficit is not being disclosed but it is fair to say the grant amounted to several million rials.″

Nahawi’s bank, founded in January 1990, presently has capital equivalent to $39 million, Nahawi said. Shareholders are the French Paribas Bank, Salalah- based public company Dhofar Investment and private Omani shareholders.

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