BOV Will Stop Processing Some Canadian Dollar Transactions After Losing Correspondent Bank
Bank of Valletta (BOV) has informed its clients that it will no longer be in a position to process some types of transactions in Canadian dollars as of 1st December after losing one of its two correspondent banks.
In an email to clients, BOV said that the Bank of Montreal had informed it that it would no longer be offering its banking services.
“Please note that initially the termination date was set as 11th November 2021, which has now been extended to 30th November 2021. This is referring to both CAD and USD accounts,” the bank said.
It added that Canadian dollar payments sent by BOV were being channelled via BMO. “Therefore as of 1st December, BOV will no longer be in a position to process CAD payments.”
A spokesperson for the bank confirmed that Bank of Montreal has ended its relationship with BOV following a “re-dimensioning of its correspondent banking services”.
Nonetheless, it said the bank was still processing payments in Canadian Dollars through the Canadian Imperial Bank of Commerce.
“As with all major international Banks, CIBC has its own risk framework and as such it will not process payments which it considers as high risk or which do not fit its risk framework.”
“BOV is still processing payments in Canadian Dollars for normal transactions but those customers who transact in particular payments have been advised that the Bank will not be in a position to handle such transactions. Such customers are very few and have been advised accordingly.”
The spokesperson noted that “all local and international banks follow rigid payment procedures in order to ensure adherence to each bank’s respective risk appetite framework”.
The bank has struggled in recent years as a result of increased scrutiny being placed on Malta and its financial institutions, as well as a de-risking exercise carried out by a number of international banks it had a relationship with, which no longer consider Malta to be worth the risk to operate in.
Malta was placed on the Financial Action Task Force’s grey list of countries requiring increased supervision in June.
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