Govt takes over Malawi Savings Bank toxic assets
Malawi government is writing off the loans obtained at state-owned Malawi Savings Bank (MSB), most of which were borrowed by private businesses and individuals who are financiers of the ruling Democratic Progressive Party (DPP).
Treasury has asked the Reserve Bank of Malawi (RBM) to issue K6 billion promissory notes to take the toxic loans off the MSB books.
According to a letter reference number ST/3/10 dated April 20 2015, Secretary to the Treasury Ronald Mangani instructed RBM Governor Charles Chuka to issue the promissory note to MSB to clear the toxic assets.
Mangani said the maturity of the promissory notes have been spread from 2016 to 2019 and will be maturing at K759 million every quarter.
Reads the letter: “As you are aware that Malawi Savings Bank Limited which government wishes to dispose of had toxic assets amounting to K6 074 773 871.70 as at 31st March 2015. The government has, therefore, taken the decision to clear these toxic assets through the issuance of an interest bearing promissory note.”
In a letter to MSB chief executive officer Ian Bonongwe, Mangani said: “I write, therefore, to inform you that the government has resolved to hive off MSB toxic assets amounting to K6 074 773 871.70 and to replace them with a promissory note in this regard, I have already requested the Reserve Bank of Malawi to issue the promissory note for this purpose.”
In another letter also dated April 20 addressed to RBM Governor Charles Chuka, Mangani instructs Chuka to issue the promissory note.
“As you are aware, the Malawi Savings Bank Limited which government wishes to dispose off, had toxic assets amounting to K6.074.773.70 as at 31st March 2015, the government has, therefore, taken a decision to clear these toxic assets through the issuance of an interest bearing promissory note.
In this regard, we would like to instruct RBM to issue an interest bearing promissory note whose interest rate shall be at the rate of the 91-day bill of the first Treasury auction in any quarter plus two percentage points….,” reads the letter to Chuka.
Ministry of Finance spokesperson Nations Msowoya and Finance Minister Goodall Gondwe have kept their comments close to their chest.
Government is seeking financial strategic partners to finance MSB which is struggling to meet Basel II requirement and the bank needs a financial injection of K23 billion.
The Public Private Partnership Commission (PPPC) recently unveiled FDH Financial Holdings Limited, owners of FDH Bank, as the only bidder to become the strategic partner after offering K4.9 billion for the 75 percent of the bank’s shares.
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Very good
This is complete madness and robbery of tax payers in broad day light. Government should make public all the names of business and individuals that borrowed money from the MBS and have not paid back. Other wise we will take to the streets and start to deal with this abuse of authority by ourselves. How can govt claim the bank has toxic debt while those who borrowed are still enjoying the loot. This is the usual DPP syndicate stealing our money just as they have done in the past. This not acceptable we want transparency on this issue. The president… Read more »
Kkkkkk political game….so this is it
let those with loans pay their debts then u sell it.
fantastic
For you dpp thugs to attain any credibility in the eyes of the Malawians, you need to do just one simple explanation. Despite the promissory note, please Explain to us how the debts by mulli and others still owed to msb are going to be paid by the debtors?
Mulli and others have assets which can be seized to pay back msb loans they took. So their debts are not really toxic unless you refer to some other debts we don’t know.
i smell death of an oppressor
I was about to be confitcated of my house beacuse of the loan I took ku indebank.I have paid this loan 400% more than I took. and they still say Ihave arreas to settle amounting to 1M. can the government please issue a promissory notes.dikuvutika zedi I have sold everything including my Neno garden but all to no avail. which door can I knock????
You Dpp Guys, That Money You’ve Agreed With Mulli To Swindle Is For An Ordinary Malawian, Listen To Our Views “DO NOT SALE OUR BANK” Using Our Money To Pay Someone’s Loan Is The Worst Thing For You To Do. I Tell You Unless You Rig Our Votes Come 2019. You Favour Mulli Coz Is A Lomwe Or Khokhola. Dr Lazarous Chakwera Pls, Jack, This Is The Time To Show Your Ability. It Even Fit For Impeachment..
DEBTGATE. I am made to repay my small loan every month from my inadequate salary and default attracts a penalty. Is Mulli more Malawian than the rest of us?