BCCI Scandal’s Human Toll With BC-Bank Scandal
Undated (AP) _ As investigators chase the wild threads of scandal surrounding the collapsed Bank of Credit and Commerce International, thousands of its customers are agonizing over more mundane issues - like their financial futures.
BCCI’s seizure led to demonstrations in Hong Kong and Dhaka, Bangladesh. In Britain, depositors are shifting money from smaller banks to stronger institutions, spooked by the scandal about the safety of their money.
″It is highly unfair that the authorities are paying no attention to the woes of the depositors,″ said Parveen Anwar, a Bangladesh-based film producer with money frozen in his BCCI account.
Anwar is one of more than 1 million people with money in BCCI when central bankers in eight countries seized the bank’s operations on July 5, following an auditor’s report that showed widespread fraud. Not all of BCCI’s banks, which operate in 70 countries, were shut down following the seizure; its Brazil bank, for example, remains open, as do some branches in Africa.
BCCI had a strong retail banking franchise in Africa, Europe and the Mideast and was especially popular with small business executives in developing countries.
BCCI had little direct U.S. holdings, as far as currently known. Seizure of the bank’s small offices in Los Angeles and New York, which had limited banking powers, won’t pose a liability to the Federal Deposit Insurance Corp.′ s bank insurance fund, U.S. regulators said.
The story is different in England, where 120,000 BCCI depositors had $404 million in the bank. It’s unclear how much of their money will be returned, or when. Prime Minister John Major has ruled out government assistance to the victims.
The bank’s seizure is harming small depositors and businessmen in hundreds of small ways.
″For us Pakistanis, BCCI represented a lifeline through which we could transfer money in Pakistani rupees to our families,″ said Ahmad Hijaz, a Pakistani who works in Jordan. ″Now we cannot do that anymore.″
In Hong Kong, about 600 protesters demonstrated against the government’s decision on July 18 to liquidate BCCI’s branches in Hong Kong and provide about 25 cents on the dollar to investors.
Cairo-based author Nawal el Saadawi wrote in Friday’s editions of The Guardian of London about her personal turmoil arising from the BCCI scandal.
Only recently, she wrote, had she become to feel secure.
″My savings were there in the bank, and my children had grown up. ... At the age of 60 I could begin to relax, travel and sometimes enjoy myself, after a long haul, a very long haul,″ she wrote.
When el Saadawi learned BCCI was to be liquidated, her first reaction was disbelief.
″Later, people kept saying to me: ‘You know, that’s life.’ Somehow, I find it difficult to submit,″ she wrote. ″I do not believe you can take away my life’s savings, even if you are the governor of the Bank of England or a few millionaires playing around with an Arab bank.″
End Adv for Sunday, July 28