Regulatory Alerts2019-01-24
Added · Updated
Financial Services (Consolidated Supervision of Banks) Directive, 2018
The Directive establishes consolidated supervision requirements for bank holding companies and banking groups in Malawi, mandating full consolidation for entities with over 50% ownership, pro-rata consolidation for 20% to 50% significant minority investments, and deduction or risk-weighting for investments below 20%. It imposes specific capital adequacy rules, including a 10% core capital limit for single borrower exposures, a 25% limit for related groups, and a 400% limit for large exposures, while prohibiting double gearing and excessive leveraging. Bank holding companies must submit annual qualitative information by January 31 and quarterly consolidated quantitative returns within 30 days of quarter-end, alongside maintaining robust board oversight, risk management, and liquidity contingency plans. The Registrar retains authority to require structural amendments, additional reporting, or capital increases if group relationships or intra-group transactions threaten the safety and soundness of the banking group.
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