Paper

Malawi: Guidelines for Prospective Applicants for a Bank or FI License, RBM

What are the legal requirements for banks and financial institutions applying for license in Malawi?
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This booklet, issued by The Reserve Bank of Malawi (RBM), aims to provide information and direction for making an application for the establishment of a bank.

The booklet describes:

  • The basic banking laws in Malawi, stipulating the requirements of:
    • A license by the Reserve Bank of Malawi;
    • Two persons of executive capacity;
    • Adequate capital;
    • Submission of periodic financial data;
    • Internal audit done by an independent auditor.
  • Activities and statutory requirements, listing:
    • Types of institutions commercial banks, merchant banks, finance institutions and mortgages;
    • Permissible activities demand deposits, savings, fiduciary activities;
    • Statutory requirements lending limit, minimum deposit limit, minimum capital, reserve requirements.
  • The application process.
  • Licensing criteria that include:
    • Competence and experience of management;
    • Adequacy of capital strength;
    • Profitability prospects of the new institution;
    • The need for services and the need for competition in the financial system;
    • The rating of a foreign bank by international rating agencies.