Forget about good financial governance!

The national parliament passed the controversial Banking Companies (Amendment) Act 2017 despite protests from a section of law makers. The amendment will allow for family members to become proprietorial in the banks they are directors of — hardly a healthy situation for any bank. It allows for four members of a family (in place of two) to be included in the board of a bank. We have now officially driven a nail into the coffin of financial discipline and accountability through this amendment despite warnings from banking experts, economists and now lawmakers.

This is a sad day for good governance and financial discipline. We are in agreement with the statement of some opposition MPs who opposed the bill that the government has effectively bowed to the long standing demand of private bank owners. We have always voiced support for reason to prevail when the financial scams were rocking the state owned banking sector and now it appears that the rot that has practically consumed nationalised commercial banks is going to have a repeat performance in private banks.

Our concerns reflect that of depositors, now that the provision for allowing so many members of the same family on the board has been enacted into law. How will accountability be maintained where the majority stake in a bank can legally be controlled by one family? With our experience of a scam-ridden banking sector, and a reticent central bank, there is serious apprehension about this amendment and how it may actually precipitate corruption as opposed to checking it.