Parliament passes motion on interest capping

By Dorica Mtenje:

Following the outcry of the country’s citizen over financial service institutions in changing higher interest rates, Parliament has passed a motion that aims at empowering the Reserve Bank of Malawi to start regulating interest rate charges.

Moving the motion in the August house on Thursday, Member of Parliament for Dowa West, Abel Kayembe said commercial bank increased the rates amidst Covid 19 which has negatively affected the economic status of citizens.

Kayembe said the current interest rates are so exploitative and ravaging on customers that some citizens are unfairly losing their assets and being declared bankrupts failure to service interest rates.

In contribution to the motion on private members day, all the members agreed to resolve the matter by asking the mover of the motion to table a Bill that would introduce amendments to the financial service act for the purpose of regulating interest charge on loans and setting a limit of total payable interest.

However, Chairperson for budget and Finance committee, Gladys Ganda asked the committee to give banks time as they are in talks with the committee on the same and bringing the bill in the midst of the talks will not do justice to them.

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