China Merchants Bank Co. is in talks to take a stake in Djibouti’s Silkroad International Bank SA after a unit of China-based IZP Group was expelled as a shareholder after being penalised for allegedly breaching anti-money laundering rules.

The discussions are an illustration of the deepening ties between the world’s second biggest economy and the tiny northeast African nation, a passing point for about a third of the world’s shipping traffic. IZP Group’s Globebill Technology Co. was among third-party payment companies fined by China’s foreign-exchange regulator for violating rules on cross-border payments, Beijing-based Caixin Global reported in February.

Djibouti’s government is proposing that Shenzhen-based China Merchants take 25 percent of Silkroad, according to Ibrahim Hamadou Hassan, the principal adviser to Djibouti’s Finance Minister and one of the Bank’s Board Members.

Silkroad’s shareholders repurchased the stake from the IZP unit in mid-February, and want the lender to handle renminbi and other foreign-currency transactions involving Chinese companies as trade between East Africa and Asia increases, he said.

Djibouti’s government expects to conclude the talks over the stake by the end of this month, Ibrahim said. Shenzhen United Financial Services Group had also expressed interest in the stake, Ibrahim said. Shenzhen United didn’t immediately respond to an emailed request for comment.

Djibouti’s Finance Minister Ilyas Dawaleh signed an agreement with China Merchants Bank to cooperate as a correspondent bank in China if it becomes a shareholder in the lender, which started in January 2017. China Merchants Group didn’t immediately respond to requests for comment.

A new feasibility study’s being done for Silkroad after IZP’s ouster and may be completed this year, according to Ibrahim, who said conflicts over the shareholding have set back some projects for at least a year.

China Merchants Group is already deeply involved with the bank. Before IZP shares were bought back, a share register in December showed that CMG’s venture-capital subsidiary owned 10 percent of Silkroad, while Silk Road E-Merchants, a joint venture between the group and IZP, holds 35 percent. Djibouti’s Finance Ministry held 25 percent.

The Chinese state-owned lender’s affiliate, China Merchants Port Holdings Co., also owns 23.5 percent of Port de Djibouti SA, which operates the Doraleh Multi-Purpose Port.