RBM ease fears over New Finance Bank
The Reserve Bank of Malawi (RBM) says the newly-licensed New Finance Bank will operate under a normal regulatory framework and there is no need for investors and depositors to be uneasy over its operations.
The former Finance Bank was shut down a couple years ago and placed under voluntary liquidation but the RBM has once again licensed the bank following application by its shareholders to trade as the New Finance Bank.
Earlier in March, the Zambia-based franchise which is the main shareholder in the company said from Lusaka that the company could resume operations as early as May but the company is yet to start operations.
But speaking in an interview, RBM spokesperson Mbane Ngwira said while some of the new bank’s shareholders might be the same, the two franchises are different.
“There is no need for concern as Finance Bank was placed under voluntary liquidation by its owners and not necessary forced to do so. The one we have financed now is the New Finance Bank. There could be some similarities in shareholders but these are different banks. Our regulations accept that if you were under voluntary liquidation you can also apply for licensing,” added Ngwira.
He said further investor fears should be eased by the realisation that the new bank will also be regulated as other banks.
“The licensing process is the same. Normally to open a bank you apply and meet specific conditions such as capital in form of $500 million and other parameters such as approval of shareholders. The regulatory framework is the same for all the banks,” explained Ngwira.
Zambia’s Daily Mail quoted Finance Bank Zambia (FBZ) Limited Chairperson Rajan Mahtani in March as saying that the bank plans to open a branch in Malawi in May as it tries to fulfill its mission of expanding its footprint and take advantage of the growth opportunities in the sub-Saharan Africa.
“In this regard, New Finance Bank Limited is scheduled to open in Malawi in the next six weeks. We are in advanced discussions with Zimbabwe for the acquisition of a bank. Plans are underway to explore opportunities in other countries within the region,” he was quoted saying.
The liquidation process under renowned lawyer Khuze Kapeta finished in 2011 following liquidation in 2005.
