Standard bank Mozambique fined US$4,6 million for flouting foreign exchange rules

 Standard bank Mozambique fined US$4,6 million for flouting  foreign exchange rules

Standard bank Mozambique fined US$4,6 million for flouting foreign exchange rules.

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Bank of Mozambique has fined Standard Bank Mozambique,  SA (290 million MT) US$4,6 million for breaching prudential and foreign exchange rules.

The central bank also sanctioned and fined the bank’s two executives for fraudulent manipulation of the exchange rate; setting up and implementing an illegal payment network based outside the country.

“Banco de Moçambique (Bank of Mozambique) hereby makes it known that, following the on-site inspection of Standard Bank Moçambique, S.A., legal proceedings have initiated against that banking institution and two of its managers, namely, Mr. Adimohanma Chukwuma Nwokocha, Managing Director, and Mr. Carlos Domingos Francisco Madeira, Director of Corporate and Investment Banking, for serious breaches of prudential and foreign exchange nature,” Bank of Mozambique announced in a statement.

“To Standard Bank Moçambique, S.A. — a ­net in the total amount of 290,104,050.00 MT (two hundred and ninety million, one hundred and four thousand and fifty meticais), suspension, up to 1 (one) year, from the exchange rate conversion activity, and publication, by Banco de Moçambique, of the de­nitive penalty, at its expense.”

 Nwokocha was fined 6,380,090.00 MT (US$99,300), disquali­fied from undertaking positions of responsibility and management functions in credit institutions and ­financial companies in the country for a period of 6 years.

Madeira will fork out 14,036,198.00 MT (US$220,600), and sanctioned from undertaking positions of responsibility and management functions in credit institutions and ­financial companies in the country for a period of 6 years.

“The offenses committed include, but are not limited to, (i) fraudulent manipulation of the exchange rate; (ii) setting up and implementing an illegal payment network based outside the country, which generally resembles SIMOrede; (iii) carrying out irregular ­nancial derivatives transactions to hedge the risk associated with currency fluctuation, involving the Director of Corporate and Investment Banking as a client; (iv) non-regularization of export commitment terms; and (v) not delivering records to the Banco de Moçambique within set time limits, which presents a clear action of obstructing the inspection activity,” Bank of Mozambique said.

Mozambique’s central bank said it is working with shareholders of Standard Bank to protect the interests of clients and other stakeholders and ensure the stability of the fi­nancial system.

“In this regard, continuous monitoring measures have been developed, which may allow for lifting the suspension to Standard Bank, S.A before the set term, upon positive assessment of results. Such measures include, for shareholders, submitting and implementing a credible action plan to remedy irregularities and, for Banco de Moçambique, assigning a resident inspector to ensure the on-going monitoring of the action plan,” said Bank of Mozambique.

Fidelity Hamilton Mhlanga

Fidelity Hamilton Mhlanga has been writing finance and business news over the past 5 years. He earned a BSC in Media and Society Studies and Masters of Development Studies from Midlands State University, in Zimbabwe. He follows mining, insurance, banking and energy stories. He is passionate about development and growth.

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