Mpasu urges govt to rescind sale of Malawi Savings Bank

Former Speaker of the National Assembly Sam Mpasu has urged government to rescind its decision to sale Malawi Savings Bank (MSB) and put in place mechanisms that can resuscitate the operations of the institution.

The Peter Mutharika administration has come under heavy criticism from some quarters of the society for the decision to sell MSB.

Mpasu, who once served as Minister of Trade, added his voice against the sale of the state-owned ban.

“I still believe the bank can survive whilst in the hands of government. I want to urge government to reorganise the management of the bank to grow its operations,” said Mpasu as quoted in the Daily Times.

Mpasu explained that MSB was established to “stimulate domestic savings so that government should reduce borrowing money from outside the country, but all the [regimes] have failed to adhere to this purpose up to this time the bank is collapsing.

“Other banks that government also introduced, including New Building Society and the Investment and Development Bank (Indebank), which was set up as government’s commercial entity, are also losing powers due to government’s carelessness.”

According to Mpasu, who is also president of the opposition New Labour Party, such tendencies to sell government-owned businesses could not have been there if governments had sound ideologies to develop the country.

He further said MSB still has the potential to help in the economic growth of the country.

Meanwhile, with the stand-off MSB faces the threat of a possible bank run, a situation where a large number of bank customers withdraw their deposits simultaneously due to concerns about the bank’s solvency.

The Ministry of Finance has reported that almost K11 billion was withdrawn from the bank between February and April 2015 alone.

The sole shareholder in the bank, Malawi Government conceded in a media statement issued that the situation remains pathetic.

“As a result of the negative publicity around the transaction, MSB faced a real threat of bank run during February and April 2015. The bank’s ability to trade was grossly weakened by the developments, which the court order of early April worsened,” the ministry said in a statement.

According to the Treasury, government determined that the collapse of the bank would cost taxpayers about K30 billion in refunds against customer deposits and other liabilities.

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