Parliament on Tuesday afternoon endorsed the amendments to the Credit Reference Bureau Act, the development which will not go down well with the country’s commercial banks.
Lately there have been complaints by Credit Reference Bureaus (CRBs) that most commercial banks were reluctant to cooperate in submitting information despite the enactment of Act in 2010.
And the amendment to the Act comes at a time the Reserve Bank of Malawi (RBM)took strong measures against the conduct of banks that do not cooperate with the CRBs.
According to the amendments, it is now mandatory for banks to provide information including material changes on credit history of the bank’s borrowers and customers to CRBs.
Aside that, banks will now be demanded to verify with CRBs on history of any potential borrower before approving a loan.
One of the CRBs in the country has marvelled at the development, describing it as a positive step.
”It means our law makers agreed with us that the Act had some gaps which some banks exploited, but now we will be able to get data for our operations as stipulated in the Act,” explained Patricia Mwase, Director for Credit Data CRB Limited.
Mwase believes the amendments will kill out monopoly on the market where some banks refuse to work with other players in the credit referencing bureau sector in preference to one company.
The country has two CRBs, CRB Africa Limited and Credit Data CRB Limited.
In September government issued an order demanding all its agencies to start cooperating with the CRBs by providing them with information to help them in the mobilization of data for their credit reference
According to a directive from the Office of the President and Cabinet (OPC), all local councils and government entities should start cooperating with Credit Reference Bureaus (CRBs) in the country.
Meanwhile, RBM charges a punitive penalty of K25 million on commercial banks for failing to submit information including material changes on credit history of the bank’s borrowers and customers to CRBs.Follow and Subscribe Nyasa TV :