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Licensing Requirements and Regulatory Framework for Banks in Malawi

The Banking Act of Malawi outlines the licensing requirements and regulatory framework for banks operating in the country. Here are some key points that summarize the section:

Licensing Requirements

Only a body corporate can be licensed as a bank in Malawi.

• The Registrar may require entities that accept funds from the public, employ those funds, and grant loans or credit facilities to be licensed.
• Such entities must meet specific requirements, including financial condition, capital adequacy, and compliance with regulatory requirements.

Conditions for Licensing

When considering an application for a banking license, the Registrar will take into account factors such as:

• The applicant’s financial condition
• Capital adequacy
• Compliance with regulatory requirements

Prudential Supervision

The Registrar has the power to supervise banks and ensure they comply with regulatory requirements. This includes:

• Examining banks’ financial statements
• Conducting regular examinations
• Requiring information from affiliates or subsidiary companies

Capital Adequacy Requirements

Banks must maintain adequate capital for the conduct of their business, as prescribed by the Registrar’s directives.

Restrictions on Cash Dividends

Banks cannot declare or pay cash dividends if it would result in a breach of capital adequacy requirements.

Important Note

This is not an exhaustive summary, and you may need to refer to the actual Banking Act of Malawi for more information.