Maputo, Mozambique — Press reports in Maputo Wednesday said the World Bank has suggested Mozambique let go its third largest commercial bank, the Austral Bank, into liquidation.

The beleaguered Austral Bank came close to collapse early April, when its private shareholders, a consortium headed by the Southern Bank Berhard of Malaysia, bailed out.

Bank of Mozambique governor Adriano Maleiane said Austral Bank required an increase in capital of no less than 1,300 billion meticais and a further 1,500 billion meticais for the pension fund.

The total financial requirement is equivalent to about 150 million US dollars.

When the Bank of Mozambique got word that private shareholders were not willing to provide the money, it appointed a provisional board of directors to restructure Austral - an intervention the World Bank objected to.

Newspaper accounts on the matter quoted President Chissano as telling economists at a meeting Monday that the World Bank wanted the Central Bank to hands off Austral and let the latter find its own way out of the crisis.

In what sounded a resistance, Chissano was quoted as telling Monday's meeting that the government defended its intervention on grounds that it was better to let the new Austral Board ascertain the real situation of the bank before taking a final decision as to its fate.

Monday's meeting had no agenda, with the President simply expressing a desire to hear the opinion of the economists on government's five-year programme and its poverty reduction strategy.

A second meeting was scheduled in five weeks during which the economists would present their appraisal of government's strategy.