The Reserve Bank of Malawi (RBM) says lawyers dealing with the financial sector are key to country’s economic growth; hence, the need for them to conversant with the regulatory framework.
Speaking at a seminar for financial services lawyers on Monday in Zomba, the central bank’s secretary Samuel Malitoni said deposit-taking, lending, payment and settlement activities of financial intermediaries have placed banks and other financial institutions at the centre of economic activity of any country.
He said: “The importance of a vibrant financial sector with a strong legal framework cannot be overemphasised, institutions like general insurers provide risk transfer mechanism that allows big projects to be undertaken in a country without fear of risk.
“On the other hand, life insurers, pension fund schemes and equity markets broaden and offer depth to the financial system by providing infrastructure for pooling long term national savings and re-channelling them into productive investments necessary for growth.”
An assessment of the financial system by the World Bank and the Malawi government in 2004 to 2005 through the financial sector regulatory reforms programme concluded that the financial sector in Malawi is relatively underdeveloped and that there is need to institute measures to deepen and broaden the sector for it to contribute more to economic growth.
The report also said the financial sector was bank centric with low penetration of non-bank financial products.
The challenges identified in the report led to the introduction of comprehensive regulatory reforms for the financial sector which involved the modernisation of existing legal frameworks and development of the new laws for those sectors which are not regulated by the RBM.
Since 2010, Parliament has passed the Financial Services Act, Banking Act, Microfinance Act, Insurance Act, Securities Act, Credit Reference Bureau Act, Financial Cooperatives Act, RBM (Amendments) Act and Pension Act 201.
In an interview, Malawi Communications Regulatory Authority (Macra) deputy director (legal consumer affairs) Thokozani Chimbe said lawyers in the financial sector should also be aware of the crimes that have come due to digitalisation in the financial sector. n