Malawi Parliament approves new banking Bill to shield depositors from bank collapses

Malawi's Parliament has given the green light to Bill No. 9 of 2026 — the Banking (Amendment) Bill — in a move designed to shore up the country's banking sector and better protect ordinary customers' savings.

The Bill was tabled by Finance and Economic Planning Minister Joseph Mwanamvekha, who told MPs the new law would give regulators fresh tools to step in and rescue struggling banks before they collapse.

Presenting the Bill for its second reading on Tuesday, the minister said the amendments would widen the legal options available for dealing with failing banks, allowing authorities to intervene earlier and more effectively.

He said the changes were designed to protect depositors' money while safeguarding financial stability and maintaining public confidence in the banking system.

Under the new law, the Registrar of Financial Institutions will be handed sweeping new powers — including the ability to force through recapitalisation, mergers, bridge banks and asset transfers at troubled lenders.

The Bill also cracks down on risky insider dealing, capping loans to related parties and insiders at just 10 per cent of a bank's core capital — a move aimed at tightening corporate governance and slashing financial risk across the sector.

The reforms won broad backing across the political divide, with spokespersons for political parties, the Joint Parliamentary Committee on Legal Affairs and the Budget and Finance Committee all throwing their support behind the Bill.

MPs said the changes would pave the way for the swifter liquidation of struggling banks and ensure viable assets could be transferred in an orderly fashion — protecting ordinary depositors from losing their hard-earned savings should a bank run into trouble.