Is gov’t serious to allow Finance Bank re-open in Malawi?

It is incredible that the Reserve Bank of Malawi (RBM) has granted a banking license to Finance Bank (FB) to resume its operations in Malawi after its license was revoked in 2005 after being involved in serious malpractices and flouting banking procedures.

Mahtani. Chairman of Finance Ban;: Licence granted last year after meeting with Goodall Gondwe in Lilongwe

Mahtani. Chairman of Finance BanK: Licence granted last year after meeting with Goodall Gondwe in Lilongwe

In its 2005 report, RBM unequivocally documents its reasons why it revoked Finance Bank license. Among the serious criminal activities that Finance Bank was involved in include opening ghost accounts which were used as conduit to externalize scarce foreign exchange to Pakistan, failure to comply with the Banking Act and Exchange Control Regulations and money laundering activities. For example, more than 3,000 accounts were opened and closed on the same day, and more than 4,000 accounts were opened and closed within one month. Another shocking example relates to 75 accounts that were opened in Lilongwe Branch, but were all operated by one person of Asian origin.

A forensic audit by KPMG, a highly-reputable worldwide auditing firm, found that “44,054 instances of the transactions occurring on the same days of matching values, with a high number of the foreign exchange transactions being directed toward a group of banks owned by the Pakistan-headquartered Habib Bank”.

RBM further noted in its report that these illegal activities started way back in 1999. “From 1999, FBM Limited repeatedly engaged in practices which violated the Malawi banking laws, the Exchange Control Regulations, directives and guidelines issued by the Reserve Bank of Malawi. FBM was on several occasions warned by the Reserve Bank about banking malpractices and was advised to change but did not despite several warnings”FM was also under investigation by the Anti-Corruption Bureau for its shady deals.

The current government and RBM administration should have upheld the decision taken against FM. The previous RBM administration, under Governor Victor Mbewe and General Manager Neil Nyirongo, did excellent work to unearth shady dealing of FM. The decision to close FB was taken to preserve the integrity of the banking sector and to uphold relevant statutes. The criminal activities that FB was involved in should have landed some of its officials in jail. But government was lenient with them. What has changed for FM for to be re-registered?

The government through the Minister of Finance Goodall Gondweand RBM Governor Charles Chuka owe Malawians an explanation why they have allowed Finance Bank to re-open. Allowing such a dishonest bank with an appalling track record of criminal activities to re-open renders people who make decisions to speculation that they have been palm-oiled.

Speculation heightens when media reports filter through that FB chairperson RajanMahtani, who has been in trouble with the Zambian authorities overmalpractices and corruption allegations, made several visits to Malawi after the death of BinguwaMutharika to meet government officials including the then president Joyce Banda and minister Goodall Gondwe.

Certainly, Finance Bank (whether it is trading under a news name) does not deserve to re-open in Malawi. The re-opening of Finance Bank will undermine the ability of institutions like the Anti-Corruption Bureau to fight corruption. It would be difficult for ACB to investigate such as a bank because it has the backing of the powers that be. Its reopening shows it is untouchable!

Secondly, it is also doubtful whether RBM would be as professional and dutiful as the previous RBM management under Mbewe and Nyirongo to takestern action against FB should it lapse into money laundering and criminal activities. The failure of RBM to detect money laundering activities and embezzlement of government funds in cashgate scandal gives little hope that it would work in the interest of the nation.

No patriotic Malawian should open an account with this bank. It needs to be boycotted. Why allow a foreign bank that has been stealing our forex, violated our Exchange Control Regulations and Banking Act to resume operations. Do you think a Malawian bank operating in Zambia would be allowed to resume its operations if it was closed for criminal activities?

In Zambia, it is illegal for someone who has been banned and stripped of their banking license in another country to operate a bank. Why are Malawian authorities letting its people down?And why should FB come back to Malawi? Why not open a branch in Zimbabwe, Botswana or Namibia? Through background and credibility checks, Mahtan knows that his bank cannot not be allowed to be registered in these countries. But he also knows that it is only in Malawi where leaders are easily manipulated because they accept anything (perhaps because of poverty) even from institutions involved in criminal activities as long as they are promised something in return. This is the worst decision RBM and government have made relating to the banking sector.

Malawians can read an abridged 2005RBMreport on Finance Bank illegal activities on the links below:

http://zambiareports.com/2014/06/17/malawi-ban-finance-bank-operating-illegally/

http://www.faceofmalawi.com/2012/11/finance-bank-re-opening-in-malawi-hangs-in-balance-due-to-past-money-laundering-record/

  • Lowani Mtonga is former national director of MISA (Malawi Chapter). He holds an MA in Journalism and Media Studies.
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38 thoughts on “Is gov’t serious to allow Finance Bank re-open in Malawi?”

  1. RBMCORRUPT says:

    FINANCE BANK OF MALWI, SOUTH AFRICAN BANK ,FDH BANK ,NBS BANK AND MALAWI SAVINGS BANK NEED TO BE CAREFULLY SCRUTINIZED BY NOT RBM BUT GOVERNMENT OF MALAWI. FOR ON THIS DATE I HAVE SPOKEN.

  2. ben says:

    How can RBM issue a licence to bank which did not perform the teh stipulated laws, it should be banned

  3. Thitherward Wendo says:

    FB don’t need to pay bribes any more. They have evidence of the bribe-taking ten years ago, and all they do now is threaten to expose this historical corruption.

    It is much cheaper to blackmail than to bribe.

  4. gaba says:

    mbala ukooooo!

  5. Mphongo Zidana says:

    I would like to agree with those advocating for a boycott of this bank. I remember one of my friends how he struggled to have his money back when this bank was closed following malapractices. Will our leaders ever be patriotic?

  6. MORE BLESSINGS says:

    GOD help us is this not a conduit for terrorist funding?our forex ayimalizanso mwina ndizogwirizana ndi boma kuti azitulutsa ndalama zanthu thru this bloody bank.why?why?why?this bank again in our Malawi.A mabungwe arrange zomatcha and have this bank closed or else!

  7. Tengupenya says:

    Daggers drawn. Who will throw the first punch? Clearly the bank is. to to serve Malawians. So a boycott will have little or no effect at all. Need something in addition.

  8. mgwadu says:

    They want to steal money through this bank and don’t forget that those share holders like faizal abu of pacific and zubeya of OG issa are the main sponsers of DDP, and ndi mbava zakale milandu ina ija ku court mpaka pano ma file anasowa

  9. Mtchona wopanda mano says:

    Ziko wanu, ndalama wathu. Wina wachikulire wadyapo apa.

  10. Bomanile says:

    NT, please re-open comments for any contribution by other writers but just ensure such comments appear under the correct article being commented on, instead of appearing as another full comment where it does not make sence.

  11. Nawoso akufuna kuba basi inu munaona kuti company yoti inatsekedwa nkuyambilaso? Sukulu? Chani…m

  12. Jeremy says:

    This guy is having problems in Zambia where he was operating. So now the easy country to go is Malawi. The Government, please wake up

  13. handasome says:

    once beaten twice shy. why should the same bank that grossly violated even the least banking law/rule be accepted back. i personally would accept this if the due screening process is laid bare before the nation by letting us know the flaws and breaches that were committed and the correctional measures that have been put in place not to fall in the same scenario again

    In all fairness any plausible mind should have sought after another market elsewhere. The million question is Why Malawi again. if truth be told Malawi is one of the worst performing markets, the returns on investment is not all that encouraging. Why indeed Malawi again???? simple. The appetite of some weak minds for self aggrandizement is what is bringing back all this folly. The fact that a local competent management would be put in place to me does not annul the threat we are exposed to. Overall in charge is still the same down to earth fraudster. Management are simply the primary custodians of the wishes and business aspirations of the owners. No management can make a material decision independent of the appointing authority( board) to which the fraudulent owner belongs.

    akuluakulu fisi olo asinthe tchire ndi fisi basi… if it were in the spiritual world yes i could have accepted this and considered him a convert but NOT in a business environment. NEVER. i rest my case

  14. rebel says:

    Only in Malawi where politicians are stupid. In the next five years there will be another “Swiss Leaks”

  15. abuba says:

    Every good observation indeed. Reading this makes my small brain come to think that if this bank is to pay for her sins committed in those days then our own banks should also be questioned for cash gate transactions becouse some of the mapractice mentioned are similar……

  16. wobeba wanga says:

    Good article, lets not open accounts with this bank

  17. Award Winner says:

    we don’t love our country

  18. MALAWIANS THIS IS WHAT YOU GET WHEN YOU VOTED FOR THIS DPP LED GOVERNMENT.I TOLD YOU THAT MUZALILA KOTO.LET US MARCH TO PROTEST.

  19. Moto Mtchire says:

    Goodall Gondwe should be sacked and prosecuted. How can you bring back to Malawi this money laundering bank!! This is impunity and corruption at its best. Well meaning Malawians should fight and stop this move, ASAP!!

  20. chaona mzako says:

    by allowing mathan to.iperate in malawi, u are allowing the top mafia in ur electrol system. in zambia malawi has been a problem for many yrs. he control the political platform. he is a problem here in zambia. pliz ba malawi dont allow this mafia in ur country.

  21. Nyekhulani Molimbika says:

    typical of malawians wailing without tangible action. if you ask me the bank will provide jobs, increase competetion and what a view. whether they externalise forex thats a debate for later.. achalongo anu amapita ku joni kukatenga geni are they not externalising forex?

  22. Nyaliki says:

    At 11, the shareholders are the same. The chairman is the same. What has changed? To close a bank is serious issue. These guys should not have been allowed. What they did in Malawi is a very issue.

    Those who are saying the bank was at loggerheads with Bingu are lying. The report by RBM is clear. The FM was involved in criminal activities from 1999 and did not change until it was closed in 2005. I bet you, Indians will close their accounts with other banks and gravitate to this bank and start externalising funds illegally

  23. concerned says:

    IT is PP and Amai who called back these FB thieves. Please ask DPP to reverse the decision.

  24. Patriot says:

    Angatsegule account kumeneko ndi CHITSIRU

  25. Nsendekere says:

    Let us have a complete dictionary in NT so that when spell checking is done as one types their text, the dictionary should also offer suggestions of correct spelling of the flagged words, instead of just flagging them as wrongly spelt without offering alternatives

  26. chindere says:

    DPP YILI NCHOLINGA PAMENEPA.WATCH THAT

  27. Nsendekere says:

    Apart from demonstrations, let us petition government against the re-opening of this bank. It started as a an unrealistic romour but now it is actually happening. Let us arrange a petition (against this re-opening) to be signed by as many people as possible and presented to govt and parliament

  28. kawanga says:

    People the closure of FB was politically ..Muluzi and Bingu became enemies,a competitors bank influence this, remember this bank credited Bingu with so many dollars and Bingu had billion of money with this bank. What are you doing about FMB relocating to Botswana thus hollier than thou. Mr Mtonga get your facts correct these guys are now going to Tanzania, Rwanda and Zimbabwe. In Malawi check the captains of the new bank, very integrity people in the society and there is no mmwenye working unlike others which have the whole village of amwenye.

  29. Havez al Sahalaaw says:

    Wina wadyapo pamenepa. Ife mwenye adzatumiza forex kwathu ndi banki ameneyu.
    Wachitabino kubwela.

  30. kl says:

    This is very serious and the RBM owes and explanation to Malawians.

  31. Malawi walero ndi ameneyo. Atsegula ndithu pa city plazza ku limbe.

  32. inayake says:

    I agree. This bank is very corrupt. But what many do not know is the reason why Bingu dropped Gondwe as Finance Minister.
    This issue stinks of corruption to the highest level. This is marks an era of a failed Government. Praise be to those who are independently verifying facts for the entire nation to see. Shame on Government, shame on reserve bank governor and shame on you Goodwell Gondwe.

  33. brutsha says:

    The problem is that Malawians and politicians in particular are neither nationalistic nor patriotic. Once these crooked Asians become the so called well wishers the country is sold. And that’s why they even allow them to built shacks in the middle of the town. Truth be told, if there is a race which hates black people its Asian yet they are not any better. Given the forensic history outlined in the article, would any sensible government allow them operate business in the country again? Malawi is so sick!

  34. Northerner says:

    Let us march against this bank. And what are our parliamentarians doing about this? They should take it up in Parliament.

  35. clement says:

    May be the forex reserve the president is bragging about came from Finance bank as a bribe. The Mw govt is not principled – eating its own vomit. FB is a terrorist bank. The Asian community in Mw found haven in Mw by externalising forex. FB ili ngati munthu wa Katapila. Remember how the bank tortured its employees, acc holders and its creditors?

  36. monkeybay says:

    Malawians are fools in their own country. Kunjenjemelera zakunja always ndi zomwe zikutipha. Who is Mahtan? Isnt he a living thing that would die one day? We dont want FB here again.

  37. marvelick says:

    This is really bad…. The Arab should not reopen his bank here, Gondwe paja you are corrupt sometimes, & definitely you have been corrupted by this guy! don’t misadvise the President!

  38. aphiri says:

    Human rights organizations are quite. They don’t know this issue. They were supposed to fight for government not to open this bank

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