Compliance Training for Banks in Malawi Takes Centre Stage
Malawi’s banking industry is on the cusp of a major overhaul with the Reserve Bank of Malawi (RBM) launching Risk-Based Supervision (RBS). This move aims to strengthen risk management in banks and enhance supervision, paving the way for a more secure financial system.
Emphasis on Change
In a speech delivered during the official launch, RBM Deputy Governor Mary C Nkosi emphasized the need for change in the banking industry. “We view this course as a major occasion to improve the way supervision is conducted,” she said. “Risk-Based Supervision entails change of culture in one way or the other because certain things, like risk management can only be done that way now.”
Key Changes Expected of Banks
To yield and realize full benefits of RBS initiative, banks are expected to:
- Active board oversight: Ensure policy and strategy formulation, review, and management executes its responsibility or is held accountable
- Governance structure: Not impede proper risk management and reporting
- Addressing all risks: Address all risks affecting the bank, including non-financial risks such as strategic, operational, compliance, and reputation risks
Resource Management
The RBM also emphasized the need for banks to take stock of their resources to meet the requirements to identify, measure, monitor, and control risk. “Where there are bottlenecks, board members and management present here are requested to make investments in training and some Management Information Systems,” Nkosi said.
A New Era for Banking Supervision
The launch of RBS is seen as a major milestone for Malawi’s banking industry, with the RBM committed to its legal mandate ensuring a safe and sound financial system. The RBM also appreciates the support and cooperation of banks in honouring and anchoring critical stages of the project.
Conclusion
With the official launch of RBS, the RBM is set to take a more proactive approach to supervision, restructuring the Bank Supervision Department along portfolio lines to allow for on-site inspections. This move is expected to strengthen risk management in banks and enhance supervision. The Reserve Bank of Malawi has expressed its commitment to ensuring a safe and sound financial system, acknowledging the critical role that banking plays in the country’s development agenda. With the launch of RBS, Malawi’s banking industry is set to undergo significant changes aimed at strengthening risk management and enhancing supervision.