Somali Prime Minister Abdi Farah Shirdon Saaid asked Barclays Plc to reconsider its decision to close the accounts of the nation's money-transfer services.
"It will directly affect millions of entirely innocent Somalis for whom remittances from overseas are absolutely vital," Shirdon wrote in the letter to Barclays Chief Executive Officer Antony Jenkins today. "This is how they feed their families, clothe their children and treat their illnesses."
Barclays said in May it would close the account Dahabshiil Holdings Ltd. uses to send money back to Somalia, citing the lack of "strong anti-laundering governance structures." That date was moved from July 10 to Aug. 12 and then to Sept. 30, after British lawmakers lobbied the London-based lender.
The Central Bank of Somalia estimates that remittances account for 60 percent of the Horn of Africa nation's foreign- exchange earnings. The appeal by Shirdon comes as at least 69 people were killed in a shopping mall in the Kenyan capital Nairobi by al-Qaeda-linked gunmen from Al-Shabaab, the Somali Islamist militant group. While acknowledging Barclays's "legitimate concerns" over money-laundering and terrorism, Shirdon said the bank's decision will exacerbate the situation.
"Rather than countering terrorist activity, the move will merely play into the hands of groups like Al-Shabaab by damaging Somali economic activity and forcing unemployed youth into their arms," Shirdon said in the letter to the Barclays CEO.
Barclays said it has been engaging with the British government and the remittance industry over its provision of banking services and has provided customers with additional time to find alternatives.
"As a global bank, we must comply with the rules and regulations in all the jurisdictions in which we operate," Barclays said in an e-mailed statement today. "We remain happy to serve companies who, in our opinion, have sufficiently strong anti-financial crime controls and who meet our amended eligibility criteria."
Barclays said of the four remittance companies for Somalia it had asked to find another bank, at least one had already done so.
Barclays, the U.K.'s second largest bank by assets, handles as much as a third of the $1.5 billion sent home annually by those living abroad to Somalia, according to Dubai-based Dahabshiil.
"If the accounts closure goes ahead, Barclays will be condemning millions of Somalis to terrible poverty," the prime minster said in the letter. "Somali lives may even be lost as a result." -Bloomberg