BML CEO Denies Claims That Customer Deposits Were Used for Government Debt

Mohamed Shareef, the Chief Executive Officer and Managing Director of Bank of Maldives (BML), has dismissed allegations that the bank used customer dollar deposits to settle government debts. The assurance comes after public concerns surfaced following the government's announcement that it had repaid USD 974 million in sukuk, swaps, and loans over a 40-day period. Speaking in an interview with PSM News, Shareef characterized the claims as false and emphasized that the protection of customer funds is the bank's primary priority. He clarified that BML operates strictly within banking regulations and that customer deposits are not allocated toward government borrowing. According to Shareef, approximately 70 percent of bank deposits are utilized to provide loans to independent parties. He highlighted that the majority of dollar financing is directed toward the Maldives' vital tourism sector. BML's dollar loan portfolio currently stands at nearly USD 600 million, with USD 35 million disbursed in the first quarter of 2024 alone as the bank continues to invest in the industry. This clarification follows the government's successful repayment of a USD 500 million sukuk in April, which was originally raised on the international market in 2021. The Ministry of Finance and Public Enterprises stated that this specific settlement was funded through a combination of state reserves and the Sovereign Development Fund (SDF). The SDF, which is financed by airport development and departure taxes, now maintains a foreign currency balance exceeding USD 350 million. These financial movements coincide with a period of relative strength for the nation's coffers, with official reserves reaching a historic high of USD 1.3 billion in March.