The Namibia Financial Institutions Supervisory Authority (NAMFISA) says it is addressing concerns recently raised by the IMF and World Bank in their Financial Sector Assessment Programme (FSAP).
A recent IMF report titled ‘Financial System Stability Assessment,’ among others, called for prompt enactment of long-standing bills so that non-banking institutions are in line with international norms.
Several bills such as the Financial Institutions and Markets Bill, the Micro lending Bill, the NAMFISA Bill and the Financial Services Adjudicator Bill, have been on the cards for over five years now.
When enacted, the bills will consolidate and harmonise laws regulating financial institutions in the country as well as give more bite to NAMFISA in its supervisory and custodian role of the financial services sector.
“The transformation to the new regulatory and supervisory regime will change the way in which NAMFISA exercises its regulatory and supervisory oversight of financial institutions and intermediaries, from compliance-based supervision to risk-based supervision,” NAMFISA Chief Executive Officer, Simataa Kenneth Matomola said.
“Risk based supervision (RBS) requires the authority to review the manner in which financial institutions are identifying and controlling risks. It further requires the authority to assess financial systems and individual financial institutions risk and to respond and intervene timely to observed vulnerabilities in accordance with the prescribed standards and regulations in line with the assessments.”
The IMF report also called for strengthening the accountability and transparency framework of NAMFISA.
It called for an introduction of a special resolution regime for banks and non-banks to ensure effectiveness and consistency with international best practice.
Matomola said the readiness assessment has helped them to identify areas of improvement and confirmed the regulator’s strengths.
“We are confident that the gaps will be addressed effectively,” he said.
Matomola added that several reviews were undertaken by the NAMFISA management to align its business operations with the proposed new laws.
“NAMFISA has revised its structure during the 2017/2018 financial year. The revision of the structure was to ensure that it supports both prudential and market conduct supervision and to improve operational efficiency. The authority also embarked on a process of developing and strengthening the skills, capabilities, processes and resources needed to adapt and thrive in the changing environment.”
Matomola said the regulator had to review internal processes, systems and structures to be better equipped in exercising its mandate of regulating and supervising of non-banking financial institutions.
NAMFISA was formed in 2001 to regulate and supervise financial institutions and give sound advice to the Minister of Finance.
This relates to the business of the Namibian Stock Exchange, long-term insurance, short-term insurance, asset management, unit trusts; pension funds; medical aid funds; public accountants and auditors; stock brokers; brokers and agents of insurance companies and money lenders.