Deposit Guarantee Fund: Reimbursement limit may be revised – Mozambique

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Deposit Guarantee Fund: Reimbursement limit may be revised – Mozambique

12:54 CAT | 21 Nov 2016

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The Government and the Bank of Mozambique are studying the possibility of increasing the 20,000 meticais limit on Deposit Guarantee Fund reimbursements, Bank of Mozambique supervision area administrator Joana Matsombe told journalists in Maputo on Friday.

Matsombe did not indicate at the time the new limit nor the time that it would take to complete the study, but said that there was no reason to panic, since no-one would lose their money.

“We want to reassure all the individual depositors that no one will lose their money. The Mozambican banking system is stable, solid and in good health, well capitalised, and has liquidity to meet the needs of the market, that is, its customers,” she said.

Meanwhile, the Administrator announced that the process of returning money to Nosso Banco individual depositors would begin today (Monday). Matsombe also said that the remainder of individual deposits would be reimbursed after the calculation of the so-called bankruptcy estate [massa falida].

Matsombe said the revocation of O Nosso Banco’s license was due to the continued deterioration of the main prudential and profitability indicators, negative own funds and capital levels below regulatory minimums.

She also highlighted weak liquidity and the consequent difficulty of the bank honouring its commitments to clients, failure to comply with successive periods of mandatory reserves and negative accumulated results as among the reasons that dictated the central bank intervention.

According to Matsombe, extraordinary measures were applied to O Nosso Banco prior to the revocation of the license which failed to reverse the situation the institution was facing.

She said that on October 31 O Nosso Banco should have increased capital, which had not happened, adding that the bank’s loans to customers would continue to be collected, since they would form part of the bankrupt estate which would be used to return deposits to depositors.

Source: Noticias