New deal for tobacco farmers - 17/11/2009

NBS Bank opens foreign currency denominated accounts to tobacco growers.

NBS Bank Limited has unveiled plans to allow tobacco farmers deposit proceeds from their sales using foreign currency denominated accounts (FCDA).

NBS Bank head of retail banking Stanley Mkwamba said the development will ensure that growers reap maximum benefits from their proceeds.

“We (NBS) have decided that starting from 2010 all your proceeds should be deposited into a foreign currency denominated account (FCDA),” said Mkwamba during the opening of an agribusiness centre and presentation of a grand prize of a vehicle to the winner of a farers promotion in Mzuzu.

A foreign currency denominated account is an account that is opened in a bank in a currency other than the one of a country in which a bank is operating in.  

Tobacco is auctioned in US Dollars but farmers are paid in equivalent local currency. Mkwamba said the system of local currency payment has its challenges since the rates used to convert the currency are done arbitrarily without being negotiated with the tobacco farmers.

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