Malawi Savings Bank Ownership Sparks Debate

The ownership of Malawi Savings Bank has been a topic of debate among locals and investors alike. The bank's ownership is a matter of public record, with the government holding a majority stake.

The government's stake in the bank is a result of a previous privatization effort that aimed to increase private sector participation in the economy. This move was intended to make the bank more competitive and efficient.

However, some critics argue that the government's control over the bank's ownership structure limits its ability to operate independently and make decisions based on market principles.

The Malawi Savings Bank was established in 1967 as a savings bank for the Malawi government and its employees.

The bank's headquarters are located in Lilongwe, the capital city of Malawi.

The bank's primary goal is to provide financial services to its customers, including savings accounts, loans, and other banking services.

The Mulli's K5 billion Malawi Savings Bank case has finally been moved to the High Court. Chief Resident Magistrate Madalitso Chimwaza committed the proceedings to the High Court Commercial division.

The case involves Leston Mulli, Lloyd Muhara, and Cliff Kenneth Chiunda, who were arrested in July 2022 and granted bail. They will be answering two charges in the High Court.

The first count is conspiracy to defraud, in line with Section 323 of the Penal Code. The particulars of the offence involve the three conspiring to defraud the MSB debt collection company of money amounting to K5 billion.

Lloyd Muhara and Cliff Kenneth Chiunda are accused of abusing their authority by signing a consent order in the case between Mulli Brothers Ltd and MSB debt collection company. They allegedly purporting themselves to be a shareholder in the MSB debt collection when they were not.

State Lawyer Dzikondianthu Malunda said it's up to the High Court to decide how the case will proceed. The CRM court has finally committed this matter to the High Court with two offences to be answered.

The Malawi Savings Bank (MSB) has indeed fallen on hard times, failing to meet the minimum liquidity requirements as per Basel III specifications, which requires every bank to have a minimum liquidity reserve of US $5 million.

The government's 99 percent ownership of MSB is a law violation, as the laws do not allow an individual or entity to hold more than 49 percent in a financial institution.

MSB's problems also border on political interference in its management, with the bank undertaking costly undertakings due to political meddling.

Some examples of this interference include granting concessionary loans to students of public universities and financing the Farm Input Subsidy Programme.

The bank has also granted billions worth of unsecured loans to politically well-connected individuals, who are now failing to service these loans.

The genesis of MSB is the Post Office Savings Bank (POSB), which was established under the Post Office Savings Bank Act.

Forming MSB to replace POSB without first repealing the Post Office Savings Bank Act is actually illegal, as POSB is a baby of Parliament.