Martin Kadzere Senior Business Reporter
COMMERZBANK AG has asked local financial institutions to close their nostro accounts with the Frankfurt-based financial services group, banking sources have said.
Nostro accounts are foreign currency accounts of a bank opened abroad for settling transactions involving international movement of funds such as exports and imports.
Sources said the local financial institutions have been given notices to move their funds.
Commerzbank is the second largest bank in Germany and the state owns 15 percent stake.
“Normally, they don’t provide reasons but local banks are already acting as per their order,” said one source who requested not to be identified because the matter is confidential.
“But there is suspicion that Commerzbank no longer wants to deal with local banks because of sanctions and suspected money laundering activities.
“As a result, local banks will not be able to facilitate international transactions such as payments of imports.
“They will also not be able to secure lines of credit from the bank. A number of local banks have been given up to the end of February to wind up transactions.”
Another source said the Commerzbank might be taking a precaution to avoid punishment. Local banks are required to keep not more than 10 percent of total deposits in nostro accounts.
No comment could be obtained from Reserve Bank of Zimbabwe governor Dr John Mangudya by the time of going to print yesterday. The Bankers Association of Zimbabwe declined to comment saying the matter was more of a regulatory issue.
Last week, Barclays Plc was fined $2,5 million by the US Department of Treasury for processing transactions of companies, individuals and “related parties” on its sanction list.
The US Department of the Treasury’s Office of Foreign Assets Control said in an enforcement release that Barclays, through its units in New York, the UK and Zimbabwe, helped the Industrial Development Corporation of Zimbabwe, a state-owned development institution, and individuals linked to IDCZ, process 159 funds transfers valued at around $3,4 million between July 2008 and September 2013, according to US Treasury.
The EU and the US imposed illegal sanctions on Zimbabwe in 2002 and 2003 respectively following their fallout with Harare. The Government estimate the total impact of sanctions is close to $40 billion.