The central bank of Malawi takes steps to improve confidence in the banking sector
It unveiled new penalties for banks not complying with the Financial Services Act.The Reserve Bank of Malawi (RBM) has unveiled new punitive administrative penalties targeting financial institutions who do not respect the Financial Services Act.
These are parts of efforts from the government to streamline banks and strengthen confidence in the financial system.
RBM is expected to start enforcing the charges and penalties on October 1st, the Nyasa Times reports.
Banks are for instance expected to pay between K25 million (€39,500) and K40 million on offences related to failure to submit information, or a K40 million penalty when their exposure to an insider or related party exceeds 10 per cent of core capital.
They will also have to pay K30 million where a credit facility to an insider or related party is not secured by collateral.
The RBM will also impose punitive penalties on banks whose senior management officials serve on the board of a credit reference bureau, or for failing to submit information on credit history to a Credit Reference Bureaus.