New Finance Bank (NFB) has disclosed that “negotiations for a proposed merger” Opportunity Bank Malawi (OBM) have been “aborted”.
NFB Chairperson Francis Pelekamoyo, a former Reserve Bank of Malawi governor,said in a statement that members of the publich are “advised to be guided accordingly.”
The two institutions entered into negotiations in a desperate attempt to meet the Reserve Bank of Malawi capital requirement under Basel II.
The merger was supposed to be effected on May 1 2017 but Pelekamoyo said the talks have been aborted.
Malawi adopted an international business standard called Basel II that requires financial institutions to maintain enough cash reserves to cover risks incurred by operations.
Banks are jostling with each other for market share and with telecommunications firms offering mobile money transfers, in a country where less than a fifth of the population have bank accounts.
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Finance Bank Malawi was closed down by order of the Reserve Bank of Malawi after the bank was accused of rule-breaking.
But the bank re-entered Malawi market by registering a new financial firm called New Finance Bank and has Finance Bank Zambia as a shareholder.
Opportunity Bank is a unit of micro-lender Opportunity International
Telephone calls made to Opportunity Bank offices on Monday were not answered.
The merger could have reduced the number of licensed banks in Malawi to nine, including National Bank of Malawi and Standard Bank , a unit of Africa’s largest bank by assets.Follow and Subscribe Nyasa TV :