German Regulator Freezes Greensill Bank Operations
Fahad Shabbir (@FahadShabbir) Published March 04, 2021 | 12:08 AM
Germany's financial watchdog said Wednesday it froze the operations of the German banking subsidiary of troubled British group Greensill Capital, citing an "imminent risk" of over-indebtedness
Frankfurt am Main, (APP - UrduPoint / Pakistan Point News - 3rd Mar, 2021 ):Germany's financial watchdog said Wednesday it froze the operations of the German banking subsidiary of troubled British group Greensill Capital, citing an "imminent risk" of over-indebtedness.
The move comes as the parent company of Greensill Bank is preparing to file for insolvency, according to the Financial Times and Bloomberg News.
German regulator Bafin said it had placed an immediate "moratorium" on payments in and out of the Bremen-based bank, essentially closing down its business, "as there is an imminent risk that the bank will become over-indebted".
In its statement, the watchdog expressed concern about accounting irregularities at Greensill Bank, including in dealings with the GFG Alliance Group headed by Indian-British billionaire Sanjeev Gupta.
"During a special forensic audit, Bafin found that Greensill Bank AG was unable to provide evidence of the existence of receivables in its balance sheet that it had purchased from the GFG Alliance Group," Bafin said.
Bafin said Greensill Bank's total assets amounted to 4.5 billion euros at the end of 2020, and the bank therefore does not pose a systemic risk to Germany's financial system.
The bank describes itself as a refinancing institution for the Greensill group, which is itself a leading provider of short-term supply-chain financing for industrial firms, Bafin said.
The regulator added that under German law, deposits at the Bremen bank are guaranteed up to 100,000 euros per customer.
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