Banco Madrid is to enter insolvency proceedings, announced administrators on Monday, March 16th, just days after the troubled bank was taken over by Banco de España.

The Bank has suspended all activity after significant deposit withdrawals, the country’s central bank announced in a statement. 

The news came days after the entire board of Banco Madrid resigned and handed management over to the Bank of Spain on Thursday, March 12th. 

The change of management came after the central bank launched an investigation into accounts at the lender for suspected money laundering activities. 

“This decision comes in response to the sharp deterioration of Banco Madrid’s financial situation as a consequence of the important withdrawals from client funds after the latest events which have affected its capacity to meet its obligations,” Banco de España said in a statement.  

Customer deposits are protected by the Spanish deposit guarantee fund of up to €100,000 per client, the bank said.