Tag Archives: New Finance Bank

Law and order, Opinion

Sharp Focus: A judgment that fractures the nation on RBM vs Finance Bank

Burnett Munthali 1 Comment

The recent Supreme Court ruling directing the Reserve Bank of Malawi (RBM) to compensate Finance Bank for the revocation of its licence in 2005 has sent shockwaves across the nation, with many questioning the prudence of the judgment.

The decision, which requires the RBM to pay compensation calculated from 2005 to date, has sparked intense debate, with critics arguing that it could have far-reaching consequences for the country’s financial stability and regulatory framework.

The RBM, as the primary banking regulator, revoked Finance Bank’s licence due to concerns over its financial stability and potential risks to the broader banking system, acting within its statutory mandate to protect depositors and maintain financial stability.

However, the Supreme Court’s ruling suggests that the RBM’s actions were unlawful, and the bank is entitled to compensation for the loss of its licence.

But is this judgment a victory for justice, or a recipe for disaster?

The Attorney General’s claim for damages against the RBM is a misguided attempt to shift responsibility and undermine the regulatory authority’s autonomy, argues Burnett Munthali, a renowned commentator.

The RBM’s role is to regulate and supervise banks, not to guarantee their success, and it would be unfair to hold the RBM liable for Finance Bank’s collapse, which was reportedly due to its own mismanagement and risk-taking.

Awarding damages to the government in this context could set a troubling precedent, effectively allowing the state to shift the burden of private sector failures onto the regulatory authority, and undermining the principles of accountability and good governance.

The RBM’s actions, if deemed lawful and reasonable, should be shielded from liability to ensure that regulators can act decisively without fear of financial consequences, as provided for in Section 15(2) of the Reserve Bank of Malawi Act.

It is crucial to maintain a clear distinction between regulatory oversight and commercial risk, lest we create a moral hazard where banks take excessive risks knowing they will be bailed out or compensated.

Dr. Ken Lipenga, a renowned English language professor, echoes this sentiment, arguing that the Supreme Court’s decision raises fundamental questions about the prudence of judicial decision-making.

Jurisprudence, he notes, involves considering the consequences of a decision and its impact on the community, and the recent ruling has sparked intense debate, with many questioning its legality.

The decision could have far-reaching consequences, potentially destabilizing the economy and undermining public trust, and it is essential to consider the implications of this judgment carefully.

Malawians need to think seriously about clarifying how society wants regulation to function when regulators act in good faith, and this requires a framework that balances accountability with protection for regulators, ensuring that officials can act decisively to protect the public without fear of reprisal.

This is jurisprudence in its deeper sense: cultivating judgment across institutions and across time, and a decision that satisfies a rule but fractures the community is not justice; it is judgment without prudence.

The Supreme Court’s ruling is a classic example of judgment without prudence, and it is essential to rethink this decision to ensure that it does not have devastating consequences for Malawi’s financial sector.

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Business

New Finance Bank launched at Dzaleka Refugee camp

Special Absalom

In an effort to promote financial inclusion, New Finance Bank on Thursday officially launched the first ever Bank at Dzaleka Refugee Camp in Dowa.

Officially opening the branch, Minister of Home Affairs and Internal Security, Cecilia Chazama said the bank would ease the distance that refugees and asylum seekers had to travel to access banking services.

”I am aware that our refugees and asylum seekers had to go to as far as Dowa, Mponela, and Lilongwe just to access banking facilities,” she said.

Additionally she said the coming of the branch would ease pressure for the camp management in issuing exit permits to the refugees when they wanted to access banking services outside the camp.

Chazama urged New Finance Bank to offer quality services to the refugees, advising them to extend its services to cover all transaction needs for the refugees.

She pledged support to the new branch through the Reserve Bank of Malawi, in ensuring that operations in the camp remain a success, saying their initiative was in line with the Malawi Governments Development Agenda to strengthen the private sector.

New Finance Bank Chief Executive Officer, Zandile Shaba said refugees world over are excluded from accessing formal banking services and the new branch offers access to simple products, such as micro-lending, group loans that will further benefit the economic development of the community.

“We are launching a fully operational branch here at Dzaleka refugee camp, this is indeed a departure from what banking institutions normally focus on and this speaks to our mission of making people’s lives better,” she said.

Shaba said the camp has seen an explosion of entrepreneurism, giving rise to successful micro-businesses, from farmers to barbers, to profitable enterprises that include grocery shops, saloons, restaurants and poultry businesses. “It is indeed a unique and flourishing economic ecosystem and the only thing missing from the community was a bank.”

“It is in this context that New Finance Bank has chosen to strengthen entrepreneurial progress and broaden financial inclusion by offering the community a conveniently placed banking opportunity, coordinated with the immeasurable support of the Malawian Government, and efforts of various NGOs like the United Nations High Commissioner for Refugees (UNHCR),” Shaba explained.

Although the bank was being officially opened it has already been operating in the camp since November 2017, through a small kiosk that was erected at the camp, and over 1000 refugees have already opened bank accounts with the bank since it started operating.

The United Nations High Commissioner for Refugees Malawi Representative Monique Ekoko said the banking services being offered will empower refugees to make proper savings with the proceeds from their businesses.

“There is no denying that refugees will be delighted to benefit from these services just as any individual would, further, we look forward to additional banking services being offered in near future,” she said.

Adding: “What is also exciting is the fact that the branch will incorporate some Malawians and some Dzaleka community members in the running of its operations as UNHCR we are delighted with this news as it draws on the human resource capacities in the camp and also benefits the surrounding community.”

Dzaleka Refugee Camp hosts nearly 27,000 refugees and asylum seekers from Mozambique, Democratic Republic of Congo, Burundi, Rwanda, Somalia and Ethiopia

Business

New Finance Bank excites customers with auto and i-finance services

Maravi Post correspondent

Gilford Kadzakumanja NFB’s Deputy Chief Executive Officer

Gilford Kadzakumanja NFB’s Deputy Chief Executive Officer

LILONGWE-(MaraviPost)-In its quest to excite both existing and prospective customers, New Finance Bank (NFB) has launched the much awaited ATM and internet banking facilities.

The facilities aim at providing cost-effective, customer-driven, market-focused and relevant product along with 24/7 accessible and interoperable delivery channels.

The bank’s launch of these facilities comes against the background of  other products targetting individuals, Small and Medium Enterprises (SMEs) as well as corporates which the bank is already offering .

These products include savings to current accounts, term deposits, personal loans, SMEs and corporate loans, overdraft facilities, trade finance, accounts for denominated foreign currency, students and senior citizens accounts, salary processing, swift, electronic funds transfers, clearing and settlement services.

Gilford Kadzakumanja, NFB’s Deputy Chief Executive Officer told The Maravi Post in the capital Lilongwe that the bank is poised to take a leading role in driving excellence through the provision of quality and innovative services.

Kadzakumanja assured customers of quality and innovative banking services including ATMs offering which will accommodate balance enquiry, cash withdraw of up to MK200, 000 per day and fund transfer among others.

He therefore pledged to provide relationship banking based on integrity and convenience by anticipating pro actively responding to the bank’s customers needs.

“As technology is fast becoming an indispensable element of our lives and also as a player in the banking sector, we will leave no stone unturned to provide technologically-driven additions to our range of products and services.

“NFB remains committed to empowering the people of Malawi through the provision of affordable, accessible and convenient banking services requirements”, said Kadzakumanja.