BML Reaffirms Strict Compliance with Lending and Governance Standards

Bank of Maldives (BML) has reaffirmed its firm commitment to maintaining the highest standards of governance and compliance in all lending operations, following recent allegations suggesting irregularities in its loan disbursement process.

In a statement released on Thursday, the national bank strongly denied claims that funds were being disbursed to contractors involved in government projects without Board approval or in violation of established loan disbursement policies. The Bank clarified that such allegations are entirely unfounded and do not reflect the institution’s robust governance frameworks or operational practices.

According to BML, both its Board of Directors and Management operate with “complete prudence and independence”, guided by corporate governance standards and international benchmarks that ensure integrity, accountability, and transparency. The Bank’s operations are governed by Maldivian banking laws, prudential regulations set by the Maldives Monetary Authority (MMA), and globally recognized frameworks including Basel III and IFRS 9.

The statement emphasized that BML’s financial and operational practices undergo regular scrutiny by reputable international audit firms, whose independent reviews consistently validate the soundness of the Bank’s internal controls and decision-making processes.

“All loans disbursed by the Bank strictly comply with the credit policies and regulations established by the Board and the MMA,” the statement read. “Before granting any loan, the Bank assesses repayment capacity, exposure limits, and overall creditworthiness under strict underwriting principles.”

Addressing the allegations directly, BML clarified that companies awarded government projects — if they are existing bank customers — may apply for financing under the same commercial procedures as other clients. However, these loans are only granted after thorough evaluation based on the Bank’s risk assessment criteria and established credit policies.

The Bank also highlighted that its Board has defined clear lending limits for various sectors, including direct investment in government affairs, loans backed by government guarantees, and financing provided to state-owned enterprises and private entities linked to government projects.

Importantly, BML reiterated that no individual employee has the authority to independently approve or disburse loans. “This process operates, and will continue to operate, strictly within the policies and principles established by the Board,” the statement said, underscoring the centralized and transparent decision-making process within the Bank.

As of the end of the third quarter of 2023, BML’s total loan portfolio stands at MVR 23.7 billion, with MVR 6.5 billion in new loans issued this year. The Bank’s lending is distributed across multiple sectors — MVR 8.71 billion in tourism, MVR 5.34 billion to individual customers, MVR 5.09 billion in construction and housing, MVR 2.40 billion in transportation and communication, MVR 1.04 billion in business loans, and MVR 1.11 billion in other sectors.

“These figures clearly demonstrate that the Bank continues to support a diverse range of sectors within established risk thresholds,” the statement added.

BML reaffirmed that as a national financial institution, it remains committed to contributing to the Maldives’ economic growth and social development while upholding the rights of depositors, shareholders, and other stakeholders. The Bank stated that its operations will continue to align with international best practices and governance standards to ensure financial stability and public trust.

In conclusion, the Bank urged the public to refrain from spreading misinformation that could damage confidence in the institution. “Spreading false information without verifying facts, particularly for personal or political motives, is irresponsible and misleading,” BML stated. “We call upon all parties to act responsibly and avoid actions that could undermine trust in the national banking system.”