Regulatory Alerts2018-01-01
Financial Services (Capital Adequacy for Banks) Directive 2018
Issued by the Registrar of Financial Institutions in Malawi under the Financial Services Act, this directive establishes mandatory capital adequacy standards for banks, leasing companies, and discount houses to protect depositors and ensure financial stability. It mandates minimum core capital thresholds of USD 5 million for banks and USD 1.5 million for other institutions, alongside strict capital ratios of 10% for core capital and 15% for total capital against the capital requirement basis. The directive enforces compliance through mandatory board oversight, consolidated reporting, and severe penalties, including capital injection requirements and monetary fines up to K50 million for institutions or K10 million for senior management, while revoking the previous 2014 regulations.