Reserve Bank of Malawi Act
- Assented to on 26 April 1989
- Commenced on 1 May 1989
- [This is the version of this document as it was at 31 December 2014.]
- [Note: This version of the Act was revised and consolidated in the Fifth Revised Edition of the Laws of Malawi (L.R.O. 1/2018), by the Solicitor General and Secretary for Justice under the authority of the Revision of the Laws Act.]
Part I – Preliminary
1. Short titleThis Act may be cited as the Reserve Bank of Malawi Act.
2. InterpretationIn this Act, unless the context otherwise requires—“agency” means any institution, other than a bank, established or appointed under section 18;“Bank” means the Reserve Bank of Malawi established under section 3;“bank” means a company as a bank under the Banking Act;[Cap. 44:01][5 of 2011]“Board” means the Board of Directors of the Bank established under section 6;“Code of Conduct” means the code of conduct provided for under section 15B and set out in the First Schedule;[5 of 2011]“controlling party” has the meaning assigned thereto in the Financial Services Act;[Cap. 44:05][5 of 2011]“convertible currency” means any currency which is freely negotiable and transferable in international exchange markets at exchange rates consistent with the Articles of Agreement of the International Monetary Fund in force from time to time; “deposit liabilities” means liabilities arising from demand, time and savings deposits;“Deputy Governor” means a Deputy Governor of the Bank appointed under section 12;[5 of 2011]“director”, in relation to the Bank, means a member of the Board and includes the Governor and Deputy Governors;[5 of 2011]“external currency” means any currency, other than the currency issued by the Bank under this Act;“financial institution” has the meaning assigned thereto in the Financial Services Act;[Cap. 44:05][5 of 2011]“financial services law” has the meaning assigned thereto in the Financial Services Act;[Cap. 44:05][5 of 2011]“Governor” means the Governor of the Bank appointed under section 12;“Malawi currency” means the legal tender currency of Malawi issued by the Bank under this Act;“statutory body” has the meaning assigned thereto in the Finance and Audit Act.[Cap. 37:01][5 of 2011]
Part II – Establishment of the Bank
Part III – Principal objectives of the Bank
4. Principal objectives of the Bank
4A. Independence of the Bank
Part IV – Capital and reserves
5. Capital and reserves
Part V – Organization and administration
6. Board of Directors
7. Persons not eligible for appointment as directorsThe following persons shall not be eligible to be appointed as director—
8. Resignation of directorsA director may resign his office by giving one month's notice in writing to the President.[5 of 2011]
9. Termination of appointment as director
9A. Procedure for removal of a director
10. Filling of vacancy of a directorUpon the resignation of any director, or upon a director ceasing to hold office, before the expiry of the term for which he was appointed, another person shall be appointed in his place.
11. Meetings of the Board
11A. Disclosure of interest
11B. Committees of the Board
12. The Governor and Deputy Governors
12A. Qualifications for appointment
13. Executive duties of Governor and Deputy Governor
13A. Resignation of the Governor or Deputy GovernorThe Governor or a Deputy Governor may resign his office by giving three months' notice in writing to the President.[5 of 2011]
14. Appointment of officers and staff of the Bank
15. SalariesNo salary, fees, wage, or other remuneration, or allowance paid by the Bank shall be computed by reference to the financial results of the Bank.
15A. Protection of officers
15B. Code of Conduct
Part VI – Legal tender
16. Unit of Malawi currencyThe unit of currency of Malawi shall be the Kwacha which shall be divided into one hundred tambala.
17. Sole right to issue legal tenderThe Bank shall have the sole right of issuing bank notes and coins throughout Malawi and neither the Government nor any other person shall issue any notes and coins which are likely to pass as legal tender.
18. Provisions for issue of Malawi currencyThe Bank shall—
19. Denomination, description and form of notes and coinsNotes and coins issued by the Bank shall be—
20. WithdrawalThe Bank shall have the power to call in any of its notes and coins on giving not less than three months' notice in the Gazette and notes and coins shall cease to be legal tender on the expiry of the period for exchange announced at the time of such recall.
21. Lost and damaged currencyThe Bank shall not be required to replace destroyed and mutilated currency, but may do so at its absolute discretion.
22. Exemption from stamp dutyThe Bank shall not be liable to the payment of any stamp duties or other taxes in respect of its notes issued as currency.
23. Offenses relating to bank notes
Part VII – Foreign assets
24. International value of Malawi currencyThe international value of the Malawi currency shall be determined in accordance with the system designed by the Bank in consultation with the Minister, taking into account Malawi’s general economic situation and its competitive position, with a view to ensuring a viable balance of payments position and sustainable economic growth.
25. Foreign assets
26. Trade in foreign currencyUnless otherwise prohibited by any law relating to the control of foreign exchange, the Bank may—
27. Exchange controlThe Bank shall exercise such functions as are necessary in the administration of any law relating to the control of foreign exchange transactions in accordance with such law.
Part VIII – Powers and functions of the Bank
Division I - General powers and functions
28. General powers and functionsThe Bank may—
29. Prohibited activitiesThe Bank may not—
Division II - Monetary functions
30. Monetary functionsIn pursuance of its monetary policy the Bank shall influence the flow of money and credit, and may issue regulations with respect to the level of interest rates and foreign exchange rates.
31. Credit operationsFor the purpose of influencing the flow of money and credit, the Bank may, in accordance with such operational procedure, if any, as the Bank may lay down from time to time, engage in the following credit operations—
32. Rediscount rateThe Bank shall determine its rediscount and other rates which shall be made public by displaying such rates at its premises.
33. Credit ceilingsThe Bank may prescribe credit ceilings for banks and financial institutions aimed at limiting the availability of credit in the economy.
34. Open market operationsTo regulate the liquidity in the economy, the Bank may undertake open market operations as part of its monetary policy through the use of the following instruments—
35. Use of instrumentsThe Bank may use the instruments specified in section 34 for monetary purposes and to ensure orderly market conditions. The Bank may conduct its open market operations through outright sale and purchase or repurchase agreements or other methods.
36. Reserve requirement
37. Cash reserves
38. Interest to banks and financial institutionsDeposits under sections 36 and 37 of this Act shall not carry any interest except as the Bank shall otherwise decide, and such decisions shall be an integral part of the Bank’s monetary policy.
Division III - Relations with the Government
39. Banker and adviser to the GovernmentThe Bank shall act as a banker and adviser to the Government:Provided that the Government may maintain accounts in Malawi with other Banks, and use their services in such cases and on such conditions as may be agreed upon between the Minister and the Bank.
40. Short-term advances to the Government
41. Issue and management of Government securities
42. Agent of the GovernmentThe Bank may generally act as agent of the Government—
43. Government to consult the Bank on Government loansThe Minister shall, when contracting any external debt on behalf of the Government, consult the Bank on the terms and conditions of such debt relating to interest, fees and maturity.
Division IV — Relations with banks and other financial institutions
44. Banker to other banksThe Bank may act as banker to other banks in Malawi.
45. Clearing systemsThe Bank may promote money transfer and clearing systems and provide facilities therefor.
46. Lender to banks
47. Co-operation with banksThe Bank shall promote close co-operation with the banks and financial institutions in Malawi aimed at—
Part IX – Supervision of banks and other financial institutions
48. ***[Repealed by 5 of 2011]
49. ***[Repealed by 5 of 2011]
Part X – Accounts and statements
50. Annual accountsThe financial year of the Bank shall begin on the 1st day of January and end on the 31st day of December.
52. Accounts, annual reports and publication thereof
53. Determination of net results of the bankThe net financial results of the Bank for each financial year shall be determined by the Bank after meeting all current expenditure for that year and making such provision as it thinks fit for bad and doubtful debts, depreciation of assets, pensions, gratuities or other benefits usually provided by bankers for their staff.
54. General Reserve Fund and appropriation of profits
Part XI – Miscellaneous
55. By-lawsThe Board may, with the approval of the Minister, make by-laws for the administration and management of the Bank. Any such by-laws shall be authenticated by the Bank’s seal and shall be published in the Gazette.
56. RegulationsThe Minister may, after consultation with the Bank, make regulations for the better carrying out of the objectives and purposes of this Act, or to give force or effect to its provisions, or for its better administration.
57. Income taxThe profits of the Bank shall not be liable to income tax or other taxes in Malawi.
58. Prohibited banking namesSave with the written consent of the Minister on the recommendation, of the Bank, no bank shall hereafter be registered under the provisions of any legislation by a name which includes any of the words “Central”, “Malawi”, “National”, “Reserve” or “State” or their equivalent in any other language or their derivatives.
60. DevelopmentThe Bank shall within the framework of its powers, functions and objectives under this Act, and within the limitations of its position as a central bank, promote further development of trade, industry, agriculture, transport, financial and other sectors in Malawi.[5 of 2011]
61. Discharge of dutiesSubject to the express provision of this Act, the Bank may do all such things as are incidental to or consequential upon the exercise of its powers or the discharge of its duties under this Act.
62. Submission of information to the bankThe Bank may for monetary policy and research purposes require banks, other financial institutions and companies to submit within a reasonable period such information and in such format as may be prescribed by the Bank.
Part XII – Transitional provisions
63. TransitionalNotwithstanding the term of office of the Governor or Deputy Governor prescribed in this Act, a person serving as Governor or Deputy Governor at the commencement of this Act shall continue to serve in accordance with the instrument of his appointment then subsisting and shall be eligible for reappointment under this Act.
History of this document
31 December 2017
31 December 2014 this version
01 May 1989
26 April 1989