The Bank of Mozambique (BdM) has revoked the penalty that led to the blocking of accounts for financial institutions that incurred a deficit in the constitution of mandatory reserves for two consecutive periods. This decision was made official in a notice issued by the regulator, which came into force on August 9.
According to the notice, the BdM recognizes that it is “necessary to adjust the penalty regime” provided for in Notice no. 1/GBM/2023, of April 26, which established the regulation on the calculation and constitution of mandatory reserves. Article 13 of that notice, which provided for the automatic blocking of the balance of the free movement accounts of offending banks, has now been repealed without the introduction, so far, of an alternative penalty.
The repealed article specified that “if a credit institution incurs a deficit in two consecutive periods of constitution of mandatory reserves, the Bank of Mozambique will automatically block the balance of the free movement account”. This measure was criticized, particularly by the International Monetary Fund (IMF) and business associations, which warned of the potential negative impacts on the liquidity of the banking system and, by extension, on the economy.