Reserve Bank of Malawi admits fraud rise
The Reserve Bank of Malawi (RBM) Wednesday acknowledged that the country was reporting increased cases of digital financial fraud.
RBM Governor Wilson Banda told the Legal Affairs Committee (LAC) of Parliament that cases of financial fraud had swelled, such that an off-site analysis indicates that over 200 complaints were lodged with commercial banks in the last six months.
“Where investigation outcomes revealed that financial consumers lost funds due to negligence or inefficiencies by service providers, the Office of the Registrar [at the central bank] directed concerned financial institutions to refund the victims,” he said.
Banda added that the fraud was happening through bank card use, merchant collusion as well as mobile banking.
“We believe that many Malawians are being duped by fraudsters due to lack of information, necessitating the need for increased digital financial literacy awareness,” the RBM chief said.
During the engagement, which centred on e-transaction regulations of 2019, RBM indicated that mobile money service providers reported to them that up to 90 percent of fraud cases were emanating from the country’s prisons.
The central bank said it was engaging stakeholders, including prison authorities, to bring the situation under control.
Banda also informed committee members that RBM had drafted the Financial Consumers Protection Bill, 2021, which, he hoped, would enhance the mandate of the Registrar of Financial Institutions to protect financial consumers, including users of digital financial services, from risks including fraudulent digital transactions.
LAC Chairperson Peter Dimba said the committee was ready to help in reviewing the bill once it was ready for Parliament’s scrutiny.
“When they bring the bill to Parliament, we, as a committee, will go through it, appreciate it and make suggestions on how to make the bill relevant. Our aim is to make sure that Malawians are protected when using digital platforms,” he said.
Other legal frameworks include Payment Systems Act, Financial service Act and Financial Crimes Act.
