The government is not going to intervene in the dispute between the Bank of Mozambique (BM) and Moza Banco over the BM's intervention to remove Moza from a situation of near insolvency.

However, according to executive spokesman Inocêncio Impissa, who put forward the government's position yesterday, the windows for this are not completely closed.

"The Bank of Mozambique is an authority. So they have to go all the way and ask the government to intervene if they can't reach a consensus," he said.

He explained, however, that the Executive's non-intervention is a prerogative due to the Central Bank's autonomy and ability to analyze and make prudential decisions about the behavior of banking institutions. "And it has specific rules for doing so."

"What we are doing is avoiding as much as possible interfering in the functioning of the Bank of Mozambique. To intervene in this case there would have to be a specific request for intervention," he said.

But what opposes Banco de Moçambique and Moza Banco?

In short, the Bank of Mozambique intervened in the shareholder structure of Moza Banco without providing legal cover for its actions. How so? Well, Moza Banco was almost bankrupt and needed around three billion meticais to restructure. In the process, it needed 12 billion meticais.

However, this did not please Moza Banco and the institution filed an appeal to annul BM's intervention. The Maputo City Court decided to annul BM's intervention. But BM, dissatisfied, appealed to the Administrative Court, which also decided to uphold the decision of the Maputo City Court.

The basis for these decisions is the fact that the Bank of Mozambique has not published in writing the Notice of the Governor of the Bank of Mozambique in the Boletim da República, regarding the intervention.

The BM even tried to justify the violation of the law, claiming that in order to legitimize its intervention in Moza Banco it was not necessary to publish the Governor's Notice, but in doing so it contradicted itself, since the Constitution of the Republic of Mozambique requires that the Notices of the Governor of the Bank of Mozambique be published in the Boletim da República under penalty of legal ineffectiveness. Read more...