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The vast majority of individual clients of the failed Mozambican retail bank “Nosso Banco” (“Our Bank”) will receive all the money they deposited back, guaranteed Mozambican Prime Minister Carlos Agostinho do Rosario on Thursday.
Speaking in the Mozambican parliament, the Assembly of the Republic, in response to an urgent request for information about the collapse of Nosso Banco from the main opposition party, the rebel movement Renamo, Rosario said the bank only had 5,100 individual depositors. 4,500 of these (91 per cent of the total) have less than 20,000 meticais (about 270 US dollars) in their accounts.
Since the Deposit Guarantee Fund (FGD), operated by the Bank of Mozambique, will reimburse clients of failed banks with up to 20,000 meticais each, most of the individual depositors will lose no money at all.
Rosario added that the 20,000 meticais limit could be raised, if there are sufficient resources available. The FGD pays nothing to corporate clients, or to clients who held money in foreign currency accounts. They will have to wait for the liquidation of the bank to see how much, if anything, they receive.
The FGD is financed by contributions from the state, the Bank of Mozambique and the commercial banks. The 20,000 meticais limit is not just for Nosso Banco clients, but for depositors in any bank that goes bankrupt.
A liquidation commission, headed by the company Deloitte, will work out the size of the Nosso Banco bankruptcty estate, and will then pay off anyone with an outstanding claim on the bank – the creditors, the bank’s workers, the depositors and finally, if there is any money left, the shareholders.
The bankruptcy estate will come from collecting all the money owed by clients who took out loans from Nosso Banco, and selling off all the bank’s assets. There are not many of these – the bank had just three branches and eight ATMs, all in Maputo.
Rosario pointed out that the decision to liquidate Nosso Banco was the exclusive responsibility of the Bank of Mozambique, which enjoys operational independence.
The central bank, he said, must “take the measures it deems necessary to ensure the stability and solidity of the financial system. Stability of the financial system is a necessary condition for chanelling savings into investment for the sustainable growth of the economy”.
Since the central bank found that Nosso Banco “did not meet the minimum requirements for continuing to operate, it was obliged to revoke its licence”.
Giving further details, Finance Minister Adriano Maleiane said a plan for recapitalizing the bank was proposed in 2014, but did not have the desired effect. Its situation deteriorated to such as extent that by 2015 it was not sending the central bank the legally required information that all commercial banks must submit.
Nor was it constituting the obligatory reserves – the amount of money that any commercial bank must deposit with the Bank of Mozambique. The compulsory reserves coefficient currently stands at 15.5 per cent.
This failure was repeated month after month, and the central bank took punitive measures against Nosso Banco in 2015, including a ban on the bank making any further loans. The Bank of Mozambique also wanted to see Nosso Banco draw up a strategic plan, which would require the injection of at least 2.5 billion meticais.
Most of this money would have to come from the two main shareholders, the National Social Security Institute (INSS), which owned 77.2 per cent of the shares in Nosso Banco, and the national electricity company, EDM, which owned 15.13 per cent. But these are public bodies, which had already sunk capital into the bank over the previous decade with no gains to themselves, and they declined to provide any more money.
Maleiane said the central bank gave Nosso Banco a deadline of 31 October to meet the various legal limits. The most important of these is the solvency ratio, which should be at least eight per cent, but in Nosso Banco had fallen to below zero.
When Nosso Banco failed to meet this deadline, liquidation became inevitable.Source: AIM
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