Regulatory Alerts2019-01-01
Financial Services (Transactions of Prudentially Regulated Microfinance Institutions with Related Parties) Directive, 2019
Issued by the Registrar of Financial Institutions under Malawi’s Financial Services Act, this Directive establishes regulatory requirements for prudentially regulated microfinance institutions regarding transactions with insiders and related parties. It mandates that all credit facilities be extended on an arm’s length basis, caps individual exposures at ten percent and aggregate exposures at twenty-five percent of core capital, and requires board approval with independent monitoring. The Directive further enforces strict disclosure, record-keeping, and policy implementation standards while authorizing the Registrar to impose monetary penalties of up to fifty million Kwacha for non-compliance.
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