CBL: Imposes Restrictions on Cititrust, TipMe After Probe

• The Central Bank of Liberia has imposed regulatory restrictions on Cititrust Savings and Loans Liberia Limited and TipMe Liberia Limited.
• This action stems from serious concerns about their financial conditions, governance, and internal controls, including Cititrust's reported inability to meet customer withdrawal requests.
• An independent forensic investigation has been launched to examine the institutions' financial health, regulatory compliance, and determine necessary actions.
• Cititrust is now restricted from accepting new deposits, granting new loans, and disposing of assets without prior Central Bank approval.
• The Central Bank encourages affected customers to submit information regarding their dealings, but cautions that this does not guarantee repayment or validate claims.

To thoroughly ascertain the scope of the issues confronting both Cititrust Savings and Loans Liberia and TipMe Liberia Limited, the Central Bank has commissioned an independent forensic and special investigation.

The Central Bank of Liberia (CBL) has initiated significant regulatory action against Cititrust Savings and Loans Liberia Limited and TipMe Liberia Limited, citing grave concerns regarding their operational integrity. This intervention follows a period of intensified supervisory oversight by the Central Bank, which was prompted by reports of Cititrust's inability to fulfill customer withdrawal requests. The CBL's assessment revealed serious deficiencies in the financial conditions, governance structures, and internal controls of both entities.

The Central Bank of Liberia restrictions extend to TipMe Liberia Limited, a licensed payment service provider, due to its connection to Cititrust through shared ownership, where similar supervisory concerns were identified. As part of its immediate response, the CBL has assigned resident supervisors to monitor Cititrust's daily operations directly. Furthermore, the Bank has implemented protective measures designed to safeguard depositors' interests and preserve the assets held by the institution, underscoring the urgency of the situation.

The regulatory actions taken by the Central Bank of Liberia are firmly rooted in the nation's legal framework, specifically the New Financial Institutions Act of 1999 and the National Payment Systems Act of 2014, alongside other relevant statutes. Under these provisions, the CBL has imposed several critical restrictions on Cititrust. These include an immediate prohibition on accepting new deposits and a halt to the issuance of new loans. Additionally, Cititrust is now barred from disposing of any assets without first securing explicit written approval from the Central Bank.

These measures are characterized by the CBL as precautionary, primarily aimed at protecting depositors, preserving institutional assets, ensuring the accuracy of records, and maintaining the integrity of the ongoing investigation and supervisory review. The Central Bank had previously instructed the management and owners of both Cititrust and TipMe to implement corrective actions, such as injecting additional capital and liquidity. However, the CBL noted that these required measures were not executed to a satisfactory or sufficient degree to alleviate the identified supervisory concerns, necessitating the current stringent intervention.

To thoroughly ascertain the scope of the issues confronting both Cititrust Savings and Loans Liberia and TipMe Liberia Limited, the Central Bank has commissioned an independent forensic and special investigation. This comprehensive inquiry is tasked with scrutinizing the financial health of the institutions, evaluating their adherence to applicable laws and regulations, and pinpointing the appropriate regulatory responses required to address any discovered violations. The CBL has issued a clear warning that any regulatory breaches or legal infractions uncovered during this investigation will be met with suitable supervisory, administrative, civil, or other legal remedies available under Liberian law.

Recognizing the anxieties of affected individuals, the Central Bank of Liberia has urged customers with complaints or concerns regarding their accounts, transactions, or dealings with Cititrust and TipMe to submit relevant information through official channels, which will be announced. This information-gathering process is intended to provide the CBL with a comprehensive understanding of the situation, thereby supporting its ongoing supervisory and investigative efforts. However, the Bank has cautioned that the submission of such information does not confirm entitlement, validate a claim, or guarantee repayment, emphasizing that the investigation and supervisory review remain ongoing and the restrictions do not represent a final determination of Cititrust's financial condition or the outcome of any regulatory proceedings.

Lawyers should advise clients with deposits or dealings with Cititrust or TipMe Liberia on potential recovery processes and the implications of the ongoing forensic investigation. Compliance officers in Liberia's financial sector should review their internal controls and governance structures to ensure full adherence to the New Financial Institutions Act and National Payment Systems Act, mitigating risks of similar regulatory interventions.

Source: Original reporting via CBL public statement.