The Tonga Development Bank is trying to reassure its customers after police raided its headquarters and its CEO was sacked.
It said customers could be fully confident that the bank was financially well positioned and claimed “confidential communications” with the Reserve Bank had been deliberately leaked.
The National Reserve Bank has permanently banned Development Bank CEO ‘Emeline Tuita from holding any position with the TDB.
Any replacement appointment will have to be approved by the Reserve Bank.
In a statement last week the Reserve Bank said the Development Bank had breached the single borrower limit, had a high percentage of non-performing loans, had weak liquidity and was not complying with regulatory directives.
The Reserve Bank said if the Development Bank continued with these practices it would drain the bank’s profitability, threaten the safety of its customers and threaten the financial system.
The Reserve Bank said it no longer had confidence in the Development Bank’s management or board resolving these concerns.
Last Friday, May 24, Police raided the Development Bank.
Police said they were responding to a complaint about an alleged breach of the Banking act. They said it would not say anything further to protect the investigation.
In response, the Development Bank issued a statement reassuring its customers.
“We wish to assure our customers that your investments continue to be safe with TBD,” the bank said.
“TDB has filed legal proceedings against the police on the basis that TDB believes the warrant was obtained and executed unlawfully by the police.
“TDB has dealt with this issue through the proper channels and in a professional manner to ensure Tonga’s only locally owned bank continues to serve the kingdom and its people.”
The Development Bank said its liquid asset ratio was 15%, three times the required minimum.
It said it maintained a risk-weighted capital position of 23%, well above the required 15% minimum.
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Police launch investigation into Tonga Development Bank after complaints
