Commercial banks in Malawi have suspended loan repayments for three months due to the coronavirus pandemic. The banks revealed the arrangement in a statement signed by President of Bankers Association of Malawi (BAM) Kwanele Ngwenya and Registrar of Financial Institutions Dalitso Kabambe who is also Reserve Bank of Malawi Governor.

The suspension, which is with effect from April 9, 2020 has been effected to mitigate the impact of the Covid-19 on the economy.

“[The commercial banks] immediately provide a three-month moratorium on interest and principal repayments for loans by borrowers,” reads part of the statement.

It adds that banks will restructure and refinance or renegotiate loans for small and medium scale enterprises, corporate insitutions and other borrowers affected by Covid-19 on a case by case basis.

They will also reduce by 50 percent fees and charges related to internet banking, mobile payments and other related services in order to encourage usage of electronic payment transactions

Moreover, until the risk of Covid-19 is under control, banks will suspend all payments of bonuses and dividends.

On its part, the Reserve Bank of Malawi will activate the Emergency Liquidity Assistance Facility and make it available to Banks on a case by case basis.

The Central Bank will also approve the recapitalisation plan under the Prompt Corrective Action (PCA) Directive beyond 90 days in the unlikely event of a Bank breaching the Prudential Capital Requirement Directive as a result of COVID-19

Malawi has registered nine cases of the coronavirus and one death. Across the globe, more than 1.6 million cases and over 96,000 deaths have been recorded.