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MSB faces March 31 D-Day to recapitalise

Wholly State-owned commercial bank, Malawi Savings Bank (MSB), faces a March 31 2015 deadline to recapitalise or risk closure, Minister of Finance, Economic Planning and Development Goodall Gondwe said yesterday.

Gondwe: I am told this is the last time
Gondwe: I am told this is the last time

Briefing journalists in Lilongwe, Gondwe said Governor of the Reserve Bank of Malawi (RBM) Charles Chuka, who is the registrar and regulator of financial institutions, has given government the directive.

He said Chuka informed him that previously there have been three postponements to act on the delay by MSB “and he [Chuka] says this is the last time.”

Said Gondwe: “He [Chuka], as a registrar, wants the ratios to agree and these are Basel II requirements and the Liquidity Reserve Requirement [LRR].”

RBM spokesperson Mbane Ngwira yesterday said the central bank cannot  comment on remarks made by the shareholder of MSB at this point.

Up for sale: The MSB head office complex in Blantyrein
Up for sale: The MSB head office complex in Blantyre

Likewise, Public Private Partnership (PPP) Commission chief executive officer Jimmy Lipunga also opted not to comment on the matter and only said the commission would now open negotiations with the sole and preferred bidder, FDH Bank Limited.

Gondwe has since disclosed that FDH Bank Limited is offering K4.9 billion to invest in the struggling bank.

However, according to Gondwe, the offer represents 75 percent of all stakes held by government in the bank.

Said Gondwe: “But our accountants will look into the value and I am not prepared to discuss it now.”

Further, Gondwe said government is not selling MSB, but inviting a strategic investor whom he said will be managing the bank.

He said anywhere in the region, the business of government is not to manage banks.

“Government will retain the shares. We are not selling MSB; we are inviting a strategic partner to join us. The investor may take the majority shareholder or not depending on circumstances,” said Gondwe.

Quizzed on how government intends to handle the bad debts crippling MSB, Gondwe said: “All I am going to do is to take them away from the bank, put together and give them to the Ministry of Justice, they will handle it.”

 

 

 

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2 Comments

  1. Gondwe is not telling the truth about governments running banks. The Chinese government own several banks. The Chinese has owns for state-owned commercial banks. These are the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China and the Agricultural Bank of China.

    Please do not cheat us. We know more than you do. Many governments in the world own banks. The problem with you is that you are failures. We know that Gondwe and his fellow politicians are behind running down MSB.

    You and cronies have are responsible for the downfall of MSB. Mulli owes the bank more than K3 billion and you are not saying anythign. You are running away from the issue. Shame on you and your fellow DPP.

    Even if you sell it now will make sure that in future we take it back from who will buy it. It must revert to the people.

  2. And who issues the ultimatum? Reserve Bank of Malawi, the same institution that miserably failed to protect public money by allowing executive thieves to steal from us???? Hahaha! Our great grand children will be laughing at us in the generations to come.

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