As the Bank of Tanzania (BoT) and the Central Bank of Cyprus (CBC) take tougher measures against FBME Bank, more details on how the $2 billion bank has been operating secretively as an exclusive club for vetted and approved clients are finally emerging.

In Cyprus, where the bank transacts about 90 per cent of its annual business, according to details gathered by The Citizen, FBME does not issue cheques, has no retail counters and its Cypriot customers are limited to mainly staff, contractors and professionals providing services to the bank.

In Dar es Salaam, where the bank moved its headquarters over a decade ago, it is the same mode of operations – vetted clients, served exclusively as VIPs in a shroud of secrecy, according to some staff, who spoke to The Citizen on condition of anonymity.

Also, for the past four years, some employees working at the bank’s headquarters have never had a formal meeting with the managing director, Mr John Lister, an 83-year-old Briton, let alone see him. One employee described Mr Lister as “very secretive”.

Explaining how FBME has been working, an employee who asked not to be named because he is not authorised to speak to the media, said: “Some clients who bank with us from Tanzania are given preferential treatment such as the VIP banking counter manned by a teller is from Cyprus, who rarely interacts with the rest of the staff.

“The clients come to the bank as if they are coming to a meeting, and often carry large bags in their cars. They would go to the fourth floor of our new building, which has state-of-the-art technology,” he said.

The source added: “Nobody really knows what is in the bags, but some employees speculate that it is either minerals or money…we have also heard some from some of our clients that the brothers (Ayoub-Farid M. Saab and Fadi M. Saab, who control the bank) are involved in gold trade in the DR Congo and Kahama, a mining town in Tanzania’s lake zone region.

“I only know that an Italian-owned resort in Zanzibar, which has been our client for three years, borrowed $4 million, but the loan is nonperforming, and I have heard rumours that the management is intending to cancel it.

“There has never been a staff meeting since I joined the bank over four years ago,” the employee concluded.

A senior official from the Tanzania Bankers Association, who also declined to be named, told The Citizen: “I think the issue shouldn’t be why the bank has very few branches in Tanzania…what should be thoroughly investigated is whether it really violated the banking regulations set by BoT as well as international rules.”

What puzzles some financial analysts is the fact that FBME claims to have a relatively limited number of customers in Cyprus, yet it also states that it transacts over 90 per cent of its global banking business, and holds over 90 per cent of its assets in its Cyprus branch, while conducting only 10 per cent of its business at its headquarters in Tanzania.

The bank’s client base seems to be small as it has only four branches in Dar es Salaam, which is also the headquarters, Arusha, Mwanza and Zanzibar. However, there is a flurry of transactions taking place between Tanzania and Cyprus and Russia, but nobody knows the owners or final destination of the money.

Although to the bank’s shareholders this might be a business strategy, US authorities have interpreted it a fishy business system aimed at hiding something.

In Mwanza, the bank opened its branch there mainly to facilitate trading in minerals, mostly gold and diamond—the darling of Russian and Lebanese traders, who have been frequently flying to Shinyanga, Kahama and Geita town to buy the minerals.

In 2012, when the Ministry of Energy and Minerals accused a Belgian-owned company of tax evasion totalling billions of shillings, FBME featured prominently after it was accused of facilitating fake invoices of gold exports.

What the US says about FBME

According to Ms Jennifer Shasky Calvery, the US Director Financial Crimes Enforcement Network, FBME facilitates money laundering, terrorist financing, transnational organised crime, fraud schemes, sanctions evasion, weapons proliferation, corruption by politically-exposed persons and other financial crimes. The Citizen could not independently verify the allegations.

READ: Tanzanian bank denies money laundering

Ms Calvery further proposes imposition of what she calls the fifth special measure that would guard against international money laundering and other financial crime risks revealed by directly restricting the ability of FBME to access the US financial system to process transactions, and indirectly by public notification to the international financial community of the risks posed by dealing with the bank.

In November 2013, the Central Bank of Cyprus stated that FBME may be subject to sanctions and a fine of up to 240 million euros (Sh480billion) for alleged violations of capital controls.