Don’t relax, RBM tells banks

The Reserve Bank of Malawi (RBM) has asked Malawi banks ‘not to relax’ in their respective business endeavours.

RBM deputy governor Mary Nkosi said this in Dowa where she officially opened the Standard Bank of Malawi’s Mponela Branch, which has increased the number of the bank’s points of representation to 26 across the country.

“I would like to take this opportunity to encourage various players on the market not to relax in their efforts to extend their outreach initiatives,” said the Nkosi.

She said in a highly competitive market, banks have a challenge to compete on the quality of services offered.

Nkosi said banks should, therefore, strive to keep customers satisfied by “offering superior products and delivering excellent services”.

Malawi currently boasts 12 commercial banks which all fall under the direct supervision of RBM as a financial sector regulator.

Large banks, National Bank of Malawi and Standard Bank of Malawi dominate the banking sector as they account for 48.0 percent of all banking system assets and deposits, according to a 2011 RBM Financial Stability Report.

“Today’s customer is sophisticated and will only distinguish institutions through quality of services,” noted Nkosi.

She also lamented that despite Malawi boasting 49 years of independence, there are ‘shocking’ numbers of people that use banks. Only 19 percent of Malawians use the formal banking system, 29 percent use informal banking services while 55 percent are unbanked, according to a Finscope survey.

Nkosi said Malawi Government has embarked on a national identification exercise to help the banks reach out to a wider range of customers who previously would not have been bankable due to identification challenges.

She said from a regulatory perspective, RBM is pleased and proud to observe that the financial institutions in Malawi survived the economic meltdown—which peaked in 2008—with resilience.

Standard Bank chief financial officer Temwani Simwaka said despite existing in Malawi for 43 years, the bank has not been complacent in its operations.

“At Standard Bank, we believe in putting the customers first in everything we do. We believe in listening to our customers and responding with offerings that meet their needs,” said Simwaka.