DAR ES SALAAM/NICOSIA, July 25 (Reuters) - Tanzania's central bank said on Friday it had taken over the management of a bank accused by the U.S. government of large-scale money laundering.
The decision comes after the Central Bank of Cyprus (CBC) placed two branches of FBME Bank under its control following a report from the U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) describing the bank as a "primary money laundering concern".
Tanzania's central bank said it took control of FBME Bank on Thursday because of the potential effect of the Cypriot move on Tanzania's own banking system. It said FBME's four branches in the east African country would remain open for business.
"The objective underlying this decision ... is to ensure safety of customers' deposits and safeguard the entire banking system," it said in a statement.
Family-owned FBME Bank - which also has a representative office in Russia - has denied the U.S. allegations and accused the Cypriot Central Bank of a "hostile takeover". It said its lawyers had already made contact with U.S. authorities.
It said FinCEN had compiled the report without its input. The bank could not immediately be reached for comment on the Tanzanian central bank's decision.
FBME Bank's Cypriot branches hold an estimated 1.7 billion euros ($2.29 billion) in deposits, according to local media reports. The Cypriot central bank said it planned to put the two local units of FBME Bank up for sale.
Bank of Tanzania said in its latest banking survey of 2013 that FBME Bank had assets of 299.6 billion shillings ($181 million) and deposits of 263 billion shillings in the country. ($1 = 0.7435 Euros) ($1 = 1655.0000 Tanzanian Shillings) (Reporting by Fumbuka Ng'wanakilala; additional reporting by Michele Kambas in Nicosia; writing by George Obulutsa; editing by Tom Pfeiffer)