Malawi: Banking Act of 1989

The Banking Act, enacted by the Parliament of Malawi in 1989, provides a framework for the operations of banks and financial institutions in the country.

The Act defines various terms that are commonly used in banking operations and discusses:

• The conditions under which a person shall be deemed to be accepting deposits;
• The licensing of banks and financial institutions, including:
  • The necessity of a license;
  • The procedure for application;
  • Considerations for its issue and cancellation.
• Prudential supervision, including:
  • Its scope and goals;
  • Disclosure of the capital base of banks, assets, liabilities, profits and losses;
  • Auditing and inspection.
• The limitations that banks have in the areas of shares and trading, appointment of officers;
• The restrictions placed by the Reserve Bank;
• Remedial measures that the Reserve Bank can take recourse to if it finds out that a bank is performing in an unlawful manner;
• The procedure that banks need to follow to wind up operations;
• Monetary supervision, detailing the role of the Reserve Bank in preserving the monetary equilibrium in the country;
• Abandoned property - various kinds;
• Fiduciary operations, detailing the limitations that the Reserve Bank places on banks in this matter;
• Other miscellaneous items;

It concludes by listing those banks and financial institutions in the country that are subject to prudential supervision.