Front PageNational News

Mutharika calls for MSB indaba

Government has set the ball rolling on the Malawi Savings Bank (MSB) sale debate by organising a meeting on Monday in Lilongwe where a cross section of people is on the attendance list.

A letter dated June 16 2015 signed by Chief Secretary to the government George Mkondiwa, which Weekend Nation has seen, indicates that President Peter Mutharika wishes to accommodate a healthy and constructive dialogue on the MSB recapitalisation.

Called for the meeting
Called for the meeting

“Government has organised an open forum involving distinguished technocrats and specialists to soberly consider this important national issue,” reads the invitation letter to one of the civil society leaders.

One of the invited people, activist Billy Mayaya, confirmed to have received an invitation letter and categorically said civil society organisations (CSOs) are not changing their position on MSB sale.

“We are summarising the points that we are going to present to government at this forum. Our position has not changed, we feel government should continue serving the people through MSB,” he said.

Mayaya said government should not focus on making profits out of the services it renders through MSB which, he said, serves many Malawians who otherwise could not have been banked.

Early this month, Mutharika suspended the process of recapitalising MSB, arguing that those commenting on the issue do so from an uninformed position.

The invitation letter says Mutharika suspended the recapitalisation process following the debate on whether government should divest its interest in MSB, and that there have been strong arguments on both sides.

MSB is going through a turbulent time following the bank’s failure to meet the Basel II regulatory directive in relation to capital adequacy.

Mutharika, in his suspension statement, said there were strong recommendations from the Regulator of Financial Services as well as the captains of the financial services industry in favour of the disposal.

However, in a letter to Minister of Finance, Economic Planning and Development Goodall Gondwe, MSB Board indicated that the bank has the capacity to grow its capital organically.

But government says MSB’s capital adequacy ratios and liquidity reserve requirements are too low for the bank to survive under the current regulatory regime.

The wholly State-owned bank, according to the Reserve Bank of Malawi, requires at least K23 billion to meet minimum capital and liquidity levels.

Ideally, that money should have come from the shareholder, government, but Capital Hill—already buckling under a huge budget deficit and debts—says it cannot afford such an injection, hence the decision to bring in an equity partner into MSB.

Related Articles

Back to top button