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| Business |
| Holiday reversal puts banks in a fix |
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by
Frank Phiri, 07 July 2006
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05:29:45
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Banks were on Thursday still not sure of availability of cash for customers when they (banks) open today after President Bingu wa Mutharika reversed his decision to extend Independence celebration holidays.
Most commercial banks lock their money in computerised facilities called “Strong Rooms” which are timed and programmed to open at specified periods.
Following the declaration of a three-day holiday on Tuesday, the banks programmed the locks to open on Saturday and were having problems to command the locks to open ahead of schedule today.
But major banks, National Bank of Malawi (NBM) and Stanbic Bank, assured the public that they would open for business today and will find ways of making the cash available.
“There were some systems which had been programmed to start working from Saturday, but our IT personnel are working hard to make them (the systems) work starting from Friday [today],” said Anne Magola, public relations officer for National Bank.
She said the bank would use skeleton staff to service customers in branches where core staff drove out of town for the holiday and subsequent long weekend. Magola cautioned that where there will be network problems, all the bank’s branches have been advised to back-up one another.
NBM Marketing Manager Wilkins Mijiga said accessing cash from the vaults “will be a challenge” and added that banks have learnt a bitter lesson.
Stanbic Bank spokesperson Rick Chikwekwe said the bank has been on standby for any changes in the holiday schedule and would not struggle to unlock its vaults.
Other banks, namely NBS Bank, Nedbank, OIBM, FMB, Loita and Indebank confirmed that they were still grappling to unlock their vaults to make them accessible for business today.
The President, who on Tuesday declared a three-day holiday until today, on Wednesday went back on his words following a backlash from the business community which estimated to lose about K2.1 billion as a result of the abrupt holiday. Mutharika has since apologised through Information Minister Patricia Kaliati..
But Edward Chilima, President of the Dealers Association of Malawi (Deama)—a grouping of financial services players—said the reversal was too late and will not help matters for key institutions in the financial district of Blantyre.
“Most financial houses had already taken settlement positions for Monday, and reverting Friday as a working day will not change a thing. This will seriously impact on the profit and loss accounts,” said Chilima. He also doubted availability of staff today.
He said the situation will also affect the Liquidity Reserve Ratio (LRR) requirement positions for banks and discount houses, which he said are likely to be off-track. The LRR is the mandatory fraction of bank deposits with Reserve Bank of Malawi and which do not earn interest.
General Secretary of the Malawi Congress of Trade Unions (MCTU) Austin Kalimanjira said workers who do not turn up in their offices today should not be liable for the government’s mistake.
“Workers are human beings and if they planned to go away, they should remain where they are and are not to blame. Government as a planner and policy maker has failed in its job,” said Kalimanjira.
Meanwhile, it was not immediately clear if settlement of Treasury Bills, which had been suspended until Monday, would go ahead today.
RBM officials could not be reached for comment yesterday.
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