Bank Medici, the Austrian private bank with potential losses of $3.2 billion arising from the Madoff fraud, has had its banking licence revoked by the Austrian Financial Market Authority because its capital stock was too low, the Wall Street Journal reports.

According to the publication, Bank Medici’s capital stock has fallen below the €5 million ($6.9 million) level required to be licensed by the FMA to carry out Austrian banking operations.

In the aftermath of the discovery of Mr Madoff’s fraud, Bank Medici emerged as the largest single source of investments into his funds, the report said.

Reuters reported in March that Bank Medici was seeking a buyer interested in its banking licence. "The main asset is a banking licence in an affluent European Union member state. To be able to enter that market quickly, simply, is an asset," the bank’s lawyer, Andreas Theiss, said at a press briefing.

In other developments, six Austrian clients have made a complaint to Vienna’s criminal court accusing the bank and chairwoman Sonja Kohn of fraud and breach of trust; US clients are also thought to be suing the bank.

Ms Kohn owns 75 per cent of Bank Medici, with Italy’s UniCredit holding the remaining 25 per cent.