Pilatus Bank has been booted out of the Malta Bankers' Assocation with immediate effect.
In a brief statement issued on Tuesday morning, the MBA said that it had noted "with concern" the events surrounding the bank over the past weeks.
Pilatus Bank founder and shareholder Ali Sadr Hasheminejad was removed as chairman of the bank on March 21 by the Malta Financial Services Authority, following his arrest in the US on suspicions of bypassing sanctions against Iran.
READ: UK agency to 'review' Casa material on Pilatus Bank
The MFSA also removed Mr Sadr's voting rights, froze all of the bank's transactions and appointed a former US financial regulator to take control of Pilatus Bank.
Kicking out #PilatusBank is a good step. But #Sadr’s wedding friends, @JosephMuscat_JM and @keithaschembri, who caused the damage in the first place are still running the country. https://t.co/XUiMNpGcwd
— Simon Busuttil (@SimonBusuttil) April 3, 2018
The MBA serves as the banking sector's lobbying body, with membership open to all banks authorised to operate in Malta. Currently chaired by BOV CEO Mario Mallia, it was set up in 1962 and joined the European Banking Federation in July 2004, following Malta's accession to the European Union.
Pilatus Bank was in litigation with Daphne Caruana Galizia, who was murdered last October, over her articles accusing the bank and Ali Sadr of facilitating corrupt political activities and money laundering.
The bank said the articles were false and defamatory.