Forum for National Development petitions RBM to investigate banks involved in 338 ATM cards confiscated at KIA

* Among the cards confiscated belonged to leading banks in the country and we call upon you to probe these banks

* Banks are supposed to conduct a Know-Your-Customer (KYC) on opening bank accounts and issuing ATM cards

* It is a serious lapse and offence by these banks that only five individuals will have these number of cards

By Duncan Mlanjira

The Governor of the Reserve Bank of Malawi (RBM), who is the financial services regulator in the country, has been petitioned by Forum for National Development (FND) to investigate banks suspected to be involved in the 338 ATM cards which were confiscated at Kamuzu International Airport by the Malawi Police involving five women.

Copied to the head of Fiscal Department of the Malawi Police; Director General of Financial Intelligence Authority (FIA); Bankers Association of Malawi president and Dean of Diplomatic Corp, the FND statement says it has noted from media reports making rounds on this matter and further they have received “allegations pertaining to this operation, which raises serious matters of money laundering, fraud and forex externalization”.

“The allegations we have received shows that among the cards confiscated belonged to leading banks in the country and we call upon you to probe these banks,” said the statement issued by FND national coordinator, Fryson Chodzi.

“Since the banks are supposed to conduct a Know-Your-Customer (KYC) on opening bank accounts and issuing ATM cards, it is a serious lapse and offence by these banks that only five individuals will have these number of cards.

“It is further alleged that each of the 338 cards, was loaded with thousands of United States dollars which is likely to run into millions. This is a very serious offence and needs to be given all necessary attention it deserves.

“The banks whose cards are involved need to seriously explain how this was allowed and all individuals involved must be brought to book.”

FND further said the media reports — as confirmed by Malawi Police Service itself — allege that staff at Reserve Bank are “also involved which seriously puts the integrity of the financial institutions in Malawi”.

“The silence on the part of RBM as a regulator is mind baffling and clearly shows of an institution that is compromised in its work. These kind of cases have a serious repercussion on the entire economy of Malawi, as the country is signatory to international laws on money laundering and combating the financial terrorism that makes it obligated to curb such kind of actions.

“Failure to deal with this matter will compel us to report to international institutions as money laundering is a serious crime worldwide and slowly Malawi is degenerating into a money laundering hub, as we raised these matters with your office before.”

Meanwhile, the Malawi Police Service told the media that it is investigating the sources of money and which banks the five women arrested on suspicion of forex externalisation were involved with.

In an interview with The Nation newspaper national police spokesperson Peter Kalaya is quoted as saying they suspect there is a syndicate of big businesses, banks and agents that is involved in money laundering and externalising forex.

He told the newspaper that: “Investigations are underway to establish the businesses involved, how long such transactions have been happening and how much was externalised and through which banks, but also the sources of money.”

The paper says this follows the arrest of the five women at Kamuzu International Airport in Lilongwe last Wednesday who were found with 338 ATM cards suspected to have been used in externalising forex.

Kalaya told The Nation that the police suspect that the five women were working with big businesses in the country to launder money and externalise forex, and that banks were party to the illegal transactions.

“We suspect that it is a syndicate,” he is quoted as saying. “Big businesses and banks could be involved in this”, adding that the police are yet to establish how much forex the five women externalised.

The five suspects were identified by the Police as Sellina Mkandawire, 39, of Ng’onga Village, Traditional Autjority (T/A) Chikulamayembe in Rumphi; Fatima Dziko, 35, of Mbomba Village, T/A Mpando in Ntcheu; Diness Mphande, 66, of Mtoole Village, T/A Fukamapiri in Nkhata Bay; Hanifa Osman, 33, of Nkosini Village, T/A Kachindamoto in Dedza; and Angella Mphande, 36, of Mtoole Village, T/A Fukamapiri, Nkhata Bay.

The Nation further quotes economic expert Betchani Tchereni as posting on his social media page, saying he feared that more people could be involved in such kind of forex externalisation and money laundering.

And in an interview with the paper on Sunday, he said when externalisation is done at such a large scale, supply of forex becomes low which in turn leads to devaluation of the kwacha.

“When devaluation happens, people who trade in forex benefit,” he is quoted as saying. “However, consumers suffer more as they have to pay more for goods.”

He further told The Nation that this is not the first time that the country has recorded such a case — hence, called for a “very alert Fiscal Police” to curb the malpractice.

The Nation also contacted RBM spokesperson Ralph Tseka, who expressed concern over the forex externalisation, but he asked for a questionnaire to respond on the matter.