MPs not exactly wrong on Malawi Savings Bank: Tenthani’s Muckraking

It is a fact that the Malawi Savings Bank (MSB) has fallen on hard times. It is failing to meet the minimum liquidity requirements as per Basel III (or the Third Basel Accord) specifications.

Malawi Savings Bank

Malawi Savings Bank

Without seeking to bother you with monetary-speak, Basel III isa global, voluntary regulatory framework on bank capital adequacy, stress testing and market liquidity.Basel III requires every bank to have a minimum liquidity reserve of US $5 million.

MSB is 99 percent owned by theMalawi Government which – in itself – is a violation of the law since the laws (Section 53 of the Financial Services Act) do not allow an individual or entity to hold more than 49 percent in a financial institution. (Of course, the Registrar of Financial institutions can waive this requirement.)

But owing to the requirements of the law, the best the government should have done could have been to float 51 percent of its shares on the Malawi Stock Exchangeand not an outright sale to a single entity. This would have allowed MSB to generate enough revenue to meet the Basel III requirements.

Unarguably, most of MSB’s problems border on political interference in its management. Due to political meddling the bank has undertaken some needless costly undertakings.

The bank, for example, was forced to grant concessionary loans to students of public universities. It was also forced to finance the Farm Input Subsidy Programme and the politically-motivatedMardef.

Some politically well-connected individuals were even granted billions worth of unsecured loans. Not surprisingly they are failing to service these loans.

In my view taking politics out of the running of thebank can easily stabilise it.

I am, therefore, inclined to agree with Members of Parliament who feel the bank must not be sold. For those who do not know, the genesis of MSB is the Post Office Savings Bank (POSB) which was established under the Post Office Savings Bank Act (Cap. 44:03 of the Laws of Malawi).

When government decided to form MSB to replace POSB, it should have repealed the Post Office Savings Bank Act. This was not done and, therefore, MSB is – in my view –is a mere brand name for POSB for which Parliament should have a very big say.

Forming MSB to replace POSB and to take over all its assets without first repealing the Post Office Savings Bank Act is actually illegal. POSB is a baby of Parliament and the august House has all the right to demand a say in its future.

MSB is potentially the biggest bank in Malawi with the widest reach. It should not be sold illegally and for a song for that matter.

 

 

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khuere
Guest

very true comments alhomwewa muwaone bwino ifeyo ndi ahlomwe , koma osaba

blue mpingaway
Guest

THE FIRST MADNESS WAS SOLVED BY THE ARREST OF THE CARDIAC, WE CAN SEE SOMETHING SNAKING TOWARDS THE CURRENT MADNESS, BUT AM NOT SURE WHAT IT IS. FROM A DISTANCE IT LOOKS LIKE GOD THIS TIME AROUND

Chikumbutso Mkumbila
Guest

AMalawi Ufulu ukutipangitsa kuti tidzivutika kwambiri mukanakhala kuti muli RSA bwenzi Malawi ali otukuka kwambiri koma nkhani ya UFULU eish!! Its too bad for me

ineyoooo
Guest

Mr gondwe u need to be a serious man. U are not dealing with kindergarden kids. U can’t be saying that something and then later saying I was misunderstood. Be serious man. Why didn’t u say u were misunderstood once you saw it in the papers. But u had to wait for the deadline to be approaching then u say “I I I wasss misunderstood. Again be serious man

Kada
Guest

Basel II, Ralph. Not Basel III.

mphande yituwa
Guest

They want to rob bank which is bad to malawians

Malawiansturo
Guest

We really know what is going through at MSB and the Thom Mpinganjira ‘s are JUST being used similarly how he syphoned money from Capital Hill through Cash gate.The problem with Malawians is that they have TOO MUCH ULEMU.If this nonsense took place in countries like South Africa or Zambia you would have seen people in the streets of Malawi but ha!!! they are good talking under the blanket.

100% Lohmwe
Guest

No don’t sale the MSB. Please ngati muli pampando kuti muthandize dziko lanu,mukwenye onse ana kongola Ma Billion,ku Bank iyi abweze

human
Guest

Mukakhala kuti ngini simukuyiza mumangoti let me not bother you with this and this speak. Tatambasulani Basel-yo ife timve bwino bwino

Abale samalani
Guest

God is watching

wpDiscuz

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