|BCCI has 120,000 UK based customers
|1991: International bank closed in fraud scandal
The Bank of England has closed down UK branches of the Bank of Credit and Commerce International (BCCI) over allegations of fraud.
The bank's 120,000 UK customers were stunned by the speed of the closure.
Even BCCI staff were not prepared for the largest ever intervention of this kind by the Bank of England, as deposits worth ?50m were frozen.
Over the weekend liquidators from accountants Touche Ross will be entering all 25 branches to carry out detailed examinations of their finances.
The Bank of England also intends to stay open and set up a telephone hotline to help worried investors.
They are advising that the UK Deposit Protection Fund will guarantee investments up to ?5,000 but investigators need to find out exactly how much is left in BCCIcoffers.
London is at the centre of a global operation to investigate the activities of Luxembourg based BCCI, which is one of the biggest privately owned financial companies in the world.
Last year they were fined $15m for laundering drug money for former President of Panama General Noriega. At the time there were calls to shut down the bank, as six of its former executives were also jailed.
Speaking today, the Governor of the Bank of England Robin Leigh-Pemberton explained: "We had no clear evidence under which we could act, under the Banking Act, until earlier this year."
There are already rumours that the bank made a huge operating loss last year and probably would have collapsed within weeks anyway.
Opposition MPs are demanding to know why action was not taken sooner but BCCI's controlling shareholder - the Abu Dhabi government - has accused the British Government of acting too quickly.
Today's closure comes in the wake of a report commissioned by the Bank of England and published by BCCI's auditors, Price Waterhouse, in June.