Parliament has referred the 2022 Banking Amendment Bill to its Committee on Budget and Finance for further scrutiny.

According to Minister of Finance Sosten Gwengwe, among other objectives, the Bill gives power to the Registrar of Financial Institutions to facilitate mandatory recapitalisation of failing banks through acquisition of additional shares by existing shareholders.

However, the opposition Democratic Progressive Party (DPP) has expressed reservations that the Bill would scare away investors.

“In its current form, this Bill is failing to balance the need between protecting the property rights of the investor as wells as protecting the depositor or the future of the bank,” said Ralph Jooma, DPP spokesperson on finance.

Jooma added much as most part of the Bill is positive in assisting struggling banks, there is need to seriously consider balancing protection of rights between depositors and investors.

But responding to the fears, the responsible Minister for Finance Sosten Gwengwe said such reservations are generated from a point of misunderstanding clauses in the bill.

“The problem we have here in Malawi is that we read something else and we sensationalise everything, if you read the clause 30 especially part three, you would now see the context of it all,” Gwengwe said.

The Bill also empowers a liquidator to effect a Purchase and Acquisition transaction by transferring good assets and liabilities, such as deposits to other banks, as may be necessary, to facilitate orderly pay-outs to depositors and resumption of other critical operations.