Mozambique central bank fines Standard Bank for alleged fraud

THE CENTRAL bank of Mozambique has fined Africa’s biggest lender, Standard Bank, $4.6 million (about R67m) for engaging in fraudulent activities, the Bank of Mozambique said this week.

The central bank also fined two of Standard Bank’s employees about $223 000 and $101 000 each, and barred the bank from engaging in some exchange-related activities for a year, it said in a statement.

Standard Bank, which is based in South Africa, did not immediately respond to a request for comment.

The central bank said that following on-site inspections, “infringement proceedings were brought against that bank (Standard Bank) and two of its managers … for serious breaches of a prudential and exchange rate nature”.

It alleged the bank and the two employees were involved in fraudulent manipulation of the exchange rate, implementing an illegal payments network based outside the country, and carrying out irregular operations of financial derivatives, among other offences.

It is not clear what impact the suspension will have, but it could be serious, because Standard Bank controls some 45 percent of the exchange market, and holds the greater part of the deposits in foreign currency.

The matter dates back to last month when the Bank of Mozambique suspended Standard Bank from all activities on the Interbank Exchange Market.

The brief statement from the central bank gave no reason for the suspension, but, according to the publication Carta de Mocambique, it followed an inspection that gave rise to suspicions that Standard Bank had committed violations of banking rules, presumably concerning exchange rate trading.

Carta de Mocambique accused the governor of the central bank, Rogerio Zandamela, of acting precipitously, because the inspection of Standard Bank had not yet been completed, nor had Standard Bank been given an opportunity to defend itself.

The paper said the atmosphere at Standard Bank was calm, and the bank was declining any responsibility for any damaging effects that the suspension may cause on the market.

Standard Bank South Africa could not be reached for comment on this matter.


By Banele Ginindza, July 14, 2021, published on IOL

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