Mauritius Seeks Overhaul after Rs 25 Billion Vanishes from 4 Banks

Almost Rs 25 billion has “vanished” from the balance sheets of four local banks through misappropriated funds, non-performing loans, and unrecoverable debts, Prime Minister Navin Ramgoolam has revealed.

Speaking during Prime Minister’s Question Time (PMQT) in Parliament on Tuesday, 19 May, Mr Ramgoolam exposed what he termed severe supervisory failures by the Bank of Mauritius during the ten-year tenure of the previous Mouvement Socialiste Militant (MSM) government.

Responding to a question from Member of Parliament Adrien Duval, the head of government warned that the situation risks driving systemic instability, eroding investor confidence, and damaging Mauritius’s reputation as an international financial centre.

The Missing Billions Breakdown

Mr Ramgoolam detailed the four specific institutions involved:

• SBM Bank (Mauritius) Ltd: The bank processed cumulative write-offs totaling Rs 14.34 billion between 2014 and 2024.
• Silver Bank Ltd: A March 2024 conservator’s report revealed Rs 8.1 billion in non-performing loans out of a total loan portfolio of Rs 8.3 billion.
• MauBank Holdings Ltd: The institution exhibits negative equity of Rs 2.95 billion, driven by accumulated losses since its inception in 2015.
• Development Bank of Mauritius Ltd (DBM): As of 30 June 2025, nearly Rs 400 million of its portfolio was classified as non-performing loans, including Rs 304 million linked to five companies currently in liquidation or receivership.

“Inaction is Not an Option”

The Prime Minister blamed insufficient regulatory oversight for allowing certain banks to engage in risky, and potentially fraudulent, practices.

This weak supervision, he added, delayed corrective measures and allowed toxic assets to accumulate.

He also singled out the operations of certain commercial bank boards, asserting they contributed to the approval of toxic loans.

“We cannot remain silent in the face of this situation. Inaction is not an option,” PM Ramgoolam declared.

He promised that the government would take all necessary steps to ensure the Bank of Mauritius fully executes its mandate with greater independence, rigour, transparency, and accountability.

Regulatory Overhaul Underway

To address the failures, the government plans to revise both the Bank of Mauritius Act and the Banking Act, aiming to align the Mauritian regulatory framework with international best practices in banking regulation and supervision.

Furthermore, the central bank will investigate the role played by certain staff members in these oversight lapses.

It will also undertake a deep restructuring of its supervision department and a complete overhaul of its current practices.

According to the Prime Minister, the Bank of Mauritius has already initiated several actions, including:

1. A review of its internal operations to strengthen its supervisory mission.
2. Enlisting a specialist from the Reserve Bank of India to boost the capacity of the supervision department and investigate past shortcomings.

Navin Ramgoolam affirmed that the government remains fully committed to restoring confidence in the Mauritian financial system, strengthening banking sector integrity, and consolidating the independence of banking supervision to build a safer, more transparent, and more resilient sector.

Source: Defi Media