In the aftermath of the saga regarding the closure of the Al-Aqsa Foundation bank account by First National Bank (FNB) due to it being listed as an organisation that aids terrorism by the US Department of Treasury, Office of Foreign Assets Control (OFAC) and other international sanctions lists; some community organisations have been calling on Muslims who bank with FNB to close their accounts and boycott the bank.

The Media Review Network (MRN) has termed this decision by FNB as unethical and Islamophobic.

Radio Islam spoke to Michael Vacy-Lyle, the CEO of First National Bank Commercial Banking to get the banks perspective and further clarify the issue that has sparked outrage amongst South African Muslims.

Vacy-Lyle said it’s not a decision FNB took, they had no option due to it being a requirement. “From a global banking perspective, it’s a requirement that customers who are on (multiple lists) not only on the OFAC list…Action needs to be taken by the financial institution. So this was not a decision FNB took, it’s a requirement,” said Vacy-Lyle.

Asked by Moulana Ravat how FNB‘s decision could be a requirement and what bearing does OFAC have on banking in South Africa? Vacy-Lyle said that banking is a global practice and banks facilitate the movement of funds around the world. “There needs to be certain astute practices between banks to make sure there is global best practice. This is just an example of one of those requirements. It’s not just FNB; it exists across all South African banks. So, most South African banks will have the same requirements upon them. It’s just global banking practice,” said Vacy-Lyle.

So if Al-Aqsa closed its account with FNB and try to open an account with any other bank, would those banks follow the same procedure as FNB? Vacy-Lyle said he can’t comment on the other banks, but they would go around a similar process towards what FNB went to.

Despite the Al Aqsa Foundation of South Africa being a bona-fide organisation and granted an annual clean bill of health by the Department of Social Services, and the South African government, OFAC has still listed Al-Aqsa. Asked to comment, Vacy-Lyle said, “The two are separate. The two are very distinct. For one, FNB is not expressing opinion at all on the bona-fida of the Al-Aqsa Foundation. We have (no certainty) what the foundation does. The unfortunate thing is that the foundation specifically found itself listed, which specifically makes it a problem from a banking perspective.”

“The important thing for the foundation and we have been in engagement with the foundation for some time. This is not done overnight. We didn’t wake up one day and go to the foundation and say listen you need to move your account. A discussion has been had with the foundation over many months. The issue is the foundation needs to manage its position on this list. Because the fact that it’s on this list is not good for the foundation. And we’ve had this discussion with the foundation and we have passed the best possible advice to them around this listing that we possibly can,” added Vacy-Lyle.

Al-Aqsa claims that the listing is a case of mistaken identity and the name on the list is actually Al-Aqsa International which is a European based organisation and there are many Al-Aqsa’s, which is not in reference to the Al-Aqsa Foundation operating in Fordsburg. Vacy-Lyle says that FNB does not take lightly (servicing) the customer. They do take (exceptions)…This has happened in the past and they will continue to do it as it’s a requirement. “The foundation is not unique.We have over the years exited relationships for various reasons.  So this is not a unique situation. When we do this, however it’s in our interests to bank as many oragnisations and entities as possible. I have a company and other entities that have appeared on similar listings in the past. But this is not a specific (to affect) Muslims and Islam, it happens as a course of banking practice,” added Vacy-lyle.

“When we make a decision to exit a relationship, we make very, very sure that we have the facts on the table. When we found out about the listing (of Al-Aqsa) the OFAC listing, we made absolutely sure that it was the (entity) that was listed. We actually went as far as engaging an independent party to do the verification around the entity to make sure that it was the correct entity that was listed”, said Vacy-Lyle.

There are claims that the Al-Aqsa Foundation has been banking with FNB for approximately a decade. It’s further claimed that Al-Aqsa International being on this OFAC list is not anything new. But rather goes back to 2003 and that FNB had raised the issue will the Al-Aqsa Foundation before and the explanation offered by the organisation was accepted by FNB.

Asked to comment why does it became a problem now, Vacy-Lyle said the foundation was first listed in 2003. He said they only became aware of the listing about 12 months ago and took the necessary action and it is not factual to say they knew about it prior to that . According to Vacy-Lyle, there were other non-Muslim organisations that were also listed and similar action was taken against those entities. However he said that none of the other orgnisations and business that were listed were Muslim organisations besides the Al-Aqsa Foundation.

Vacy-Lyle also emphasizes that compliance processes are improving all the time in South Africa and global banking. “I don’t know if you are aware, it’s quite topical, but ING bank which is a global bank, recently received a very, very significant fine for transgressions around the OFAC listings. And it’s in the press, you can have a look,” added Vacy-Lyle.

Vacy-Lyle dismissed any conspiracy theory that any lobbyists brought the listing to the attention of Rand Merchant bank or FNB. “This is just business process and we have been extremely sympathetic with the foundation. We have never passed judgment on the foundation and we don’t pass judgment on the foundation. I advised the foundation from the start as always been, ‘Please get yourself off this list’, said Vacy-Lyle.

He added, “ we’ve been sympathetic in that we’ve taken quite some time to allow the foundation…Infact the foundations accounts have not been closed. We’ve given them until the 31st March 2013 and discussions have started quite some time back. We have given significant amount of time. We have been incredibly sympathetic. FNB is a very, very South African entity. We are massively reflective of the country that we are proudly part of. We employ a significant amount of Muslims, we have a significant amount of customers, and we are a Proudly South African institution. So we have got no agenda whatsoever other than the fact that in the banking environment there are very objective requirements that we have to comply with.”

Vacy-Lyle said, “If you look at the websites of the major banks in South Africa, OFAC listing is something that is reflected on those bank websites and that they will be complying with this listing. So this is nothing new. There is definitely no precedent whatsoever. This is something that has existed for some time. So this is not a new development.”

He reiterated that if organisations find themselves listed and they find themselves wrongly listed, it is absolutely critical that they do their best to get themselves off that list.

Asked if it was possible to get off the list, Vacy-Lyle said, “It has happened. We should use Cat Steven (Yusuf Islam) as an example who’s converted to Islam. He’s obviously had challenges when travelling in the past, particularly in the States. He fought it vociferously and he’s been able to manage that situation. So it can be done, it is challenging, but it can be done.

Asked to comment on some organisations calling for a boycott, terming the decision by FNB as unethical, to be Islamophobic, Vacy-Lye said, “Our plan is just to be honest. That’s all we can be. From a FNB/First Rand perspective we just want to be honest.  We are engaging with community leaders across the country and businessmen for assistance in the matter. We offered our support to the foundation and will do whatever we can to assist the foundation and will continue to do so.”

Vacy-Lyle reiterated it would be ideal that meetings with community leaders and businessmen result in a “win-win” situation. “Its absolutely critical that there is a “win-win situation, “said Vacy-Lyle.

Moulana Ebrahim Bham, the secretary general of the Jamiatul Ulama said that FNB had met with the Jamiat, it has met with the Muslim Judicial Council, with other organisations and with the Al-Aqsa Foundation itself. “We can take it at face value, the placing of Al-Aqsa on the OFAC list has made it very difficult for banks to trade overseas and has led to a curtailment of their trading opportunities or trading activities,” said Moulana Bham.

However Moulana Bham said there are many unanswered questions and the concern is the Muslim community will together have to deal with those concerns. Among the concerns is an organisation has been placed on a list. Who places them on the list and on what basis?  He said “It’s a completely arbitrary decision by the United States Treasury to place an organisation on the list.”

Moulana Bham added that the Al Aqsa Foundation has complied with all South African regulations from the Department of Social Services to the Reserve bank. Yet it is placed arbitrary on a foreign country’s list without it having any say with regards to the decision or even contesting or appealing the decision. “What happens if we have a Japanese list, what happens if we have a German list, what happens if we have an Indian list? Would the bank than just all of a sudden take all of that into account and just arbitrary close peoples accounts, close individuals and organisations accounts?” asked Moulana Bham.

Another aspect Moulana Bham touched on was the comment made by the CEO of FNB Commercial Banking. Michael Vacy-Lyle claims that FNB is wholly and solely a South African entity. “When you say you are wholly and solely South African entity, what does it say about the sovereignty of South Africa as a nation, South Africa as a country, South African companies?  Despite your sovereignty you subject your sovereignty to the decision of a third country and you say you are unable to act and you are forced to act in this particular manner. These are some of the concerns which is something that has been placed with them and we are going to continuously be putting those concerns not only to FNB, but to the banking fraternity and relevant authorities in government.” said Moulana Bham.

When asked that when Muslims organisations face such situations, is it premature to call for instantaneous condemnation, immediate boycotts and closing of accounts, refusing to meet representatives of the bank an condemn those who do try and meet with different role players to reach an amicable solution as ‘collaborators’, sellouts and market share seekers, Moulana Bham said, “At the end of the day each and everyone has his own conscience. There are different methods of dealing with the situation. We believe in the kalimah La Ilaha Illallah, we are proud to be Muslims and there will be different approaches. But to put this type of insinuations towards one another, where does it take people?”

“To go to this particular level of accusing one another and calling one another names, I think that is unnecessary and I don’t think it helps the situation in any way. Infact I would say that is part of the market share that people are talking about,” added Moulana Bham.

Moulana Bham said he firmly believes that boycott is an important tool that can be used. It has been used in the past very effectively and has even been used in the time of Prophet Muhammad (PBUH). “There is no doubt to it. I don’t rule out boycott as a tool and it can be a very effective tool. But the way we as South African Muslims today are using boycott, I think it has rendered it to a large degree in effective. “Said Moulana Bham.

Moulana Bham added “such an effective tool that can be used, it should be the last resort. And such an effective tool that can be used for the South African Muslims whenever they feel aggrieved. But it is being rendered ineffective by emotions, getting the better of people or perhaps not using the right method with regards to boycotts.”

Moulana Ravat added, “We should tolerate each other’s differences in approach  to concerns facing the Ummah and focus on finding  common grounds to jointly address the issue, rather than start criticizing each other, as that distracts and weakens us .”

Radio Islam has learnt that following FNB’s decision to terminate the Al-Aqsa Foundations account from March 2013, Al Aqsa opened a bank account with Al Baraka. After the account was opened, the bank also decided to close the account, and has temporarily re-opened the account after discussions.  

Radio Islam also forwarded a copy of FNB’s statement to the banking ombudsman for comments and the following statement was issued by the body:

“Our mandate is to adjudicate disputes between bank customers and their banks. We do this in an independent, impartial, confidential and speedy manner. Our service is free. Unfortunately we are therefore precluded from commenting on a particular set of circumstances unless and until a formal complaint has been lodged with our offices. What we can do is refer you to the Code of Banking Practice which is a voluntary code that sets out the minimum standards for service and conduct to which all banks subscribe.”

“In terms of paragraph 7.3 of the Code: dealing with the “closing an account” the following is enumerated:

• A bank will assist you to close an account that you no longer require.
• A bank will not close your account without giving you reasonable prior notice at the last contact details that you gave your bank.
• Your bank reserves the right, however to protect its interests in its discretion, which might include closing your account without giving you notice.
• If the bank is compelled to do so by law (or by international practice);
• If you have not used your account for a significant period of time; or
• If your bank has reasons to believe that your account is being used for any illegal purposes
• It seems, therefore, that your bank is purporting to have acted to close the account in terms of the provisions of paragraph of 7.3

To listen to the full interviews with Michael Vacy-Lyle, the CEO of First National Bank Commercial Banking and Ml Ebrahim Bham,click the links below:

http://www.radioislam.org.za/index.php?option=com_content&task=view&id=28542&Itemid=125

http://www.radioislam.org.za/index.php?option=com_content&task=view&id=28541&Itemid=125