The Bankers Association of Malawi (BAM) says the new directive for commercial banks to bid to open operating accounts with government ministries, departments and agencies (MDAs) will make the sector stable.
In a published statement this week, Secretary to the Treasury Ronald Mangani said they noted growing competition for business among commercial banks and other financial institutions, which he said created suspicion that some of them were indulging in unethical practices to secure new business dealings with government.
But BAM executive director Lyness Nkungula, in an e-mailed response to a questionnaire on Tuesday, said the directive will give an opportunity to other commercial banks to open operating accounts with government and enhance stability.
She said: “I believe this will encourage healthy competition among the banks as promoting competition is broadly accepted as the best available tool for promoting consumer well-being.”
Treasury spokesperson Nations Msowoya on Tuesday said they made the decision to make the process more transparent.
“Each bank interested in opening an operating account for any government ministry, department and agency will now have to express their interest to do so through bidding,” said Msowoya.
Mangani emphasised that the move was aimed at preventing unwarranted enticement of public officers and is in line with Public Finance Management Act of 2003.
Malawi has nine commercial banks. n