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2018-01-01

Prudential Liquidity Requirements for Banks Directive 2018

Issued by the Registrar of Financial Institutions under the Financial Services Act, this directive establishes mandatory liquidity standards for licensed banks. It mandates the computation and maintenance of specific minimum liquidity ratios, designates institutional responsibility for compliance, and requires periodic submission of detailed liquidity reports. Non-compliance triggers administrative and monetary penalties, while the directive simultaneously revokes prior liquidity regulations to ensure a unified prudential framework.

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Reserve Bank of Malawi

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364

GOVERNMENT NOTICE NO. 29

FINANCIAL SERVICES ACT  
(CAP. 44:05)

FINANCIAL SERVICES (PRUDENTIAL LIQUIDITY REQUIREMENTS FOR  
BANKS) DIRECTIVE, 2018

ARRANGEMENT OF PARAGRAPHS

PARAGRAPHS

PART I—PRELIMINARY  
1. Citation  
2. Interpretation  

PART II—OBJECTIVES  
3. Objectives  

PART III—REGULATORY REQUIREMENTS  
4. Responsibility of the 2018  
5. Computation of minimum liquidity ratios  
6. Minimum liquidity ratios  
7. Liquidity reports  

PART IV—ENFORCEMENT  
8. Administrative penalties  
9. Monetary penalties  
10. Revocation  

IN EXERCISE of the powers conferred by section 34 (2) (c) of the Financial Services Act, I, DR. DALITSO KABAMBE, Registrar of Financial Institutions, make the following Directive—

PART I—PRELIMINARY

Citation  
1. This Directive may be cited as the Financial Services (Prudential Liquidity Requirements for Banks) Directive, 2018.

Interpretation  
2. In this Directive unless the context otherwise requires—  
“Act” means the Financial Services Act;  
“bank” has the meaning ascribed to that term in the Banking Act;  
“banking business” has the meaning ascribed to that term in the Banking Act;  
“liquid assets” means—  
(a) notes and coins;  
(b) cheques in the 364
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