BANKING REGULATIONS GET A BOOST AS MALAWI INTRODUCES NEW DIRECTIVES

The Reserve Bank of Malawi has recently introduced a raft of new directives aimed at enhancing risk and governance for banks in the country. The Risk and Governance for Banks Directive 2018 is designed to guide market players on proper functioning of banks by following international best practices.

Strengthening the Financial Sector

The directive is part of a broader effort to strengthen the financial sector, which has been plagued by concerns over liquidity, capital adequacy, and operational risks. According to sources within the central bank, the new directives are intended to address emerging issues that would not otherwise be addressed through the review of existing laws.

Key Measures Introduced

Some of the key measures introduced under the directive include:

Guidelines on outsourcing of services by financial institutions
Information and cybersecurity risk management for banks
AML/CFT guidelines for financial institutions in Malawi
Operational risk guidelines

The central bank has also issued a range of licensing requirements and guidelines for banks, aimed at protecting the interests of depositors and the public.

Vigilant Licensing Process

The purpose of a vigilant licensing process is to ensure that only fit and proper players are allowed to conduct banking business in the country. This will help to improve the resilience of the financial sector and enhance consumer confidence.

Industry Response

The new directives have been welcomed by industry stakeholders, who say they will help to improve risk management and ensure that customers’ deposits are safe. “These measures are long overdue,” said one banker, speaking on condition of anonymity. “They will help us to better manage risk and ensure that our customers’ deposits are safe.”

In related news, the Reserve Bank of Malawi has also introduced new regulations for the pensions and insurance sectors.

The Financial Services (Disclosure requirements for pension products and services) Directive 2018 requires pension providers to disclose key information about their products and services to customers.
Guidelines on minimum capital and solvency requirements for life insurers, general insurers, and reinsurers have been issued. These measures are aimed at ensuring that insurance companies have sufficient capital to meet their obligations to policyholders.

Further Information

For more information on the new directives, visit the Reserve Bank of Malawi’s website or contact the central bank directly.