Watch: Nosso Banco customers may only recover up to 20.000 meticais each – Bank of Mozambique

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Watch: Nosso Banco customers may only recover up to 20.000 meticais each – Bank of Mozambique

2:30 CAT | 15 Nov 2016

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The Bank of Mozambique-supervised Deposit Guarantee Fund says that compensation for depositors of the insolvent ‘Nosso Banco’ will be limited to 20,000 meticais per person (about US$260.5).

On Friday, Mozambique’s central bank announced the cancellation of the ‘Nosso Banco’ license. The bank’s conditions is so parlous that it will not be sold or restructured but simply liquidated.

Depositors may be able to recoup some of their money from the Deposit Guarantee Fund, but a September ministerial decree determined that the amount bank depositors would receive if their bank went bankrupt was strictly limited. Only holders of individual domestic currency accounts resident in the country will receive compensation, and companies or other institutions will receive nothing.

Depositors will receive their money within the next three months and the FGD will contact them to let them know when and where they can collect the money. Since the limit on reimbursement is 20,000 meticais, anyone who kept large sums in ‘Nosso Banco’ will lose much of their savings.

‘Nosso Banco’ was a very small concern and its collapse will not directly affect many people. It had a headquarters, three branches and eight ATMs, all in Maputo. According to its annual report for 2015, the bank had 2,399 customers (of whom only 466 had debit cards) and 76 employees.

A good number of clients would have been small companies or other institutions, since total deposits in 2015 amounted to 3,438 billion meticais (US $44,783,120.00), which represents an average of 1.4 million meticais (US$ 18,236.29) per customer.

Nosso Banco was largely owned by the National Social Security Institute (INSS), which held 77.2 percent of the shares.

Doubts have been voiced regarding the INSS’s decision to invest money intended to pay pensions and other benefits to Mozambican workers in a small bank that never had any prospect of becoming a serious player in the country’s financial system.