The resignation was accepted by Prime Minister Lawrence Gonzi.

The bank was at the centre of the Brindisi Freeport controversy this week, with Investments, IT and Industry Minister Austin Gatt requesting the bank to carry out an investigation into what Dr Gatt described as a probable divulging of confidential information to the Leader of the Opposition, Dr Alfred Sant.

The letter of resignation was dated Thursday, 28 October, that is, before the Brindisi Freeport issue came into the limelight. It was however made public only yesterday. The Prime Minister’s letter accepting the resignation is dated Monday 1 November. In his letter, Mr Zahra explained that his decision to resign “has been taken with great pain but with consideration of its possible implications on the market.

“I have chaired (BOV) for over six years, which could possibly be considered to be the most challenging time of its existence.

“A period during which competition had never been more intense, and when the new regulatory framework has imposed on the back heavy conformance requirements and costs. Nonetheless the bank made large steps forward,” Mr Zahra wrote.

In his reply, Dr Gonzi thanked Mr Zahra for his work and asked him to continue carrying the responsibilities of the bank until a chairman is identified and a smooth transition is ensured.”

We plan to have this process completed by Friday 12 November,” Dr Gonzi wrote.

He added that under Mr Zahra’s leadership, the bank was transformed “into a modern financial institution at a time when the banking sector in Malta (underwent) a major upheaval and change”.