Malawi: Banking Act of 1989

How does the Reserve Bank of Malawi control the operations of banks and financial institutions?
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The Banking Act, enacted by the Parliament of Malawi in 1989, provides a framework for the operations of banks and financial institutions in the country.

The Act defines various terms that are commonly used in banking operations and discusses:

  • The conditions under which a person shall be deemed to be accepting deposits;
  • The licensing of banks and financial institutions, including:
    • The necessity of a license;
    • The procedure for application;
    • Considerations for its issue and cancellation.
  • Prudential supervision, including:
    • Its scope and goals;
    • Disclosure of the capital base of banks, assets, liabilities, profits and losses;
    • Auditing and inspection.
  • The limitations that banks have in the areas of shares and trading, appointment of officers;
  • The restrictions placed by the Reserve Bank;
  • Remedial measures that the Reserve Bank can take recourse to if it finds out that a bank is performing in an unlawful manner;
  • The procedure that banks need to follow to wind up operations;
  • Monetary supervision, detailing the role of the Reserve Bank in preserving the monetary equilibrium in the country;
  • Abandoned property - various kinds;
  • Fiduciary operations, detailing the limitations that the Reserve Bank places on banks in this matter;
  • Other miscellaneous items;

It concludes by listing those banks and financial institutions in the country that are subject to prudential supervision.