National Bank of Malawi, which is the country’s largest bank by assets, has come under heavy fire from professional bodies and the public for failing to adhere to a 14-day court ultimatum to pay K1.72 billion to 99 former employees of Indebank.
In 2015 National Bank of Malawi shook the market by acquiring absolute majority shares of Indebank. In trying to align its business strategies the bank retrenched 99 employees in a manner that was contrary to legal and labour procedures.
Two weeks ago the Industrial Relations Court, while delivering and Order on Assessment of Compensation, gave National Bank 14 days for it to pay compensation to all the 99 employees.
In what is a display of contempt to the court determination the bank has allowed the 14-day ultimatum to elapse without honoring its obligations.
“They are simply exposing corporate pride by going against what the Industrial Court ordered. There are legal remedies that will correct this corporate anomaly and we are determined to pursue those corrective measures,” says a lawyer representing some of the ex-employees.
Several regulatory and administrative institutions in the financial sector have also spoken strongly against National Bank’s arrogance.
Inside sources at the Reserve Bank of Malawi say what the bank has done does not augur well with best practices within the banking sector.
“We are following the issue with keen interest and we will surely intervene to ensure that National Bank abides by the court order. In this day and age one would expect banks and financial institutions to do what is right by the book,” says one Regulation expert who did not want to be named.
So too with Bankers Association of Malawi (BAM), they have condemned National Bank for bringing the profession into disrepute.
Sources at BAM say the association will send a stern reminder to its affiliate so that the issue should be exhausted amicably.
Efforts to speak to National Bank officials were futile as several calls and messages to chief executive officer, Macfussy Kawawa and Corporate Affairs Manager, Akossah Hiwa went unanswered.