(Seychelles News Agency) - The Pakistani multi-national bank Al Habib will wind up its operations in Seychelles by November 30, the Central Bank announced on Monday.

Al Habib, which began operating in Seychelles in 2014, made an application to the Central Bank of Seychelles (CBS) in July to halt its services.

"When they came to us this year asking to stop their operations, they said that unfortunately, the business model they wanted to implement in Seychelles has not materialised," Caroline Abel, the Governor of the CBS, told reporters.

One of the main reasons why the operations of the Bank Al-Habib were not working was the challenges posed by de-risking.

De-risking refers to the decision taken by financial institutions to exit relationships and close the accounts of clients considered as high risk.

"When banks in Seychelles receive foreign currency or making payments overseas for any amount, there has to bank a bank in the middle, to process the payment before it gets to the final destination. With the threats posed by money-laundering, local banks, especially Bank Al Habib, have been severely affected as the trust of foreign banks in Seychelles was low, due to the country being seen as a high risk," said Abel.

Following CBS's approval, the bank Al Habib has already ceased operations but remains open only to undertake the necessary processes for winding up. This includes repaying all depositors and other creditors from its operations in Seychelles, a group of 115 islands in the western Indian Ocean.

The Central Bank of Seychelles said that Al Habib will be able to repay all its depositors and that they are working closely with the bank to ensure that its closure will have minimal impact on its clients.

The head of the financial surveillance division, Aaron Leong-Pon, said that CBS has already appointed a supervising agent to oversee the winding-up of the bank.

"ACM & Associates, the supervising agent will assist both bank Al Habib and CBS to ensure that the interests of its customers and the public are safeguarded," said Leong-Pon.

He added that the bank currently has 10 clients and has not issued any loans and that the operations of other banks in the country are financially sound and stable.

The Central Bank has also announced that anyone who has complaints or inquiries can contact Bank Al Habib directly on the telephone number (248) 4410040 or CBS on (248) 4282000.

Bank Al Habib currently employs three expatriate staff and CBS has been informed that they will all be transferred to the bank's head office in Pakistan.

Dawood Habib Group, the sponsor of Bank AL Habib Limited, has a history in the banking sector dating back to the 1920s and is one of the founding members of the Habib Bank Limited.

The branch of Habib Bank Limited closed in Seychelles ceased its operations in February 2019.