Abdel Ruhomutally Slams ‘Incoherent’ System as Silver Bank Collapse Sparks Fraud Allegations

The collapse of Silver Bank has triggered a fierce backlash against the Mauritian deposit insurance framework, with high-profile depositors branding the current compensation system “incoherent” and “lacking transparency.”

Abdel Ruhomutally, Managing Director of GFA Insurance Ltd and a victim of the bank’s failure, has publicly challenged the Mauritius Deposit Insurance Corporation Ltd (MDIC) over its decision to cap compensation at Rs 300,000.

The businessman has demanded an urgent explanation regarding the fund’s management and the apparent exclusion of corporate entities from immediate protection.

The Inverted Pyramid: Key Developments

• The Compensation Gap: While the MDIC has promised payouts within seven working days, the MUR 300,000 ceiling has been slammed as insufficient. Ruhomutally noted a glaring policy contradiction: the Economic Development Board requires foreign investors to hold Rs3 million in local banks for professional permits, yet the guarantee covers only 10% of that figure.
• Exclusion Concerns: Critiques have been levelled at the MDIC communiqué stating compensation is for “individual depositors residing in Mauritius.” This has sparked fears that businesses and companies may be entirely excluded from the safety net.
• Allegations of Negligence: In a stinging rebuke of the authorities, the GFA Insurance chief described the situation as “fraud, theft, and a siphoning of funds” that occurred under the gaze of the Bank of Mauritius and the government.

Questions of Transparency

Mr Ruhomutally has called for a full audit of the guarantee fund, questioning its total assets, administrative costs, and the identity of its contributors.

“Transparency? In Mauritius? A government institution? I do not know whether to laugh or cry,” he remarked, expressing deep scepticism over the official reimbursement process.

The Recovery Process

For amounts exceeding the Rs 300,000 cap, the onus now lies with the liquidator. Ruhomutally clarified that depositors should not need to take “special steps,” as it is the liquidator’s duty to realise assets and repay creditors. “We will do everything to recover every penny,” he added.

Despite the significant funds tied up in the failed bank, GFA Insurance has moved to reassure the public and its clients.

The company stated that its financial reserves remain robust, and its overall stability has not been compromised by the Silver Bank collapse.

Source: Defi Media