The Central Bank, Bank of Botswana (BoB) closed doors on a prospective banker citing unexplained deficiencies.
BoB received an application for a banking license on June 29, 2020, which bank said it was assessed in accordance with Section 6(1)(a) of the Banking Act, as well as against the criteria set out in the Banking Regulations (1995), the Bank’s Licensing Policy and, in general, Principle 5 of the Basel Core Principles for Effective Banking Supervision.
“Following an assessment, the bank decided that the application was materially deficient and was declined. The applicant was accordingly informed,” the bank stated.
According to BoB 2020 annual report, the bank received six applications for a bureaux de change license and the Bank was awaiting the security-vetting results of two entities as at December 31, 2020. Six bureaux de change were licensed, including five applications that were carried forward from 2019, while eight had their licenses revoked for a variety of operational reasons during the year. Stated in the report is of the eight bureaux de change, six voluntarily closed business operations, while two failed to comply with the regulations. Therefore, the resultant number of operating bureaux de change decreased from 60 in 2019 to 58 as at December 31, 2020.
“The overall performance of the banking industry was satisfactory for the period ending December 30, 2020. Banks complied with the prescribed statutory and prudential minimums for capital and liquidity and, therefore, soundness,” reads the report.
Previously during 2019, Bank of India (Botswana) Limited surrendered its banking license, pursuant to Section 11(4) of the Banking Act (CAP 46:04), following acquisition by First Capital Bank Limited. The acquisition followed the bank’s decision to voluntarily close operations in Botswana. The winding-up of the operations of Kingdom Bank Africa Limited (KBAL) is in progress, with the liquidator continuing efforts to collect funds from debtors. According to the report, the liquidator indicated that an interim dividend of approximately P500 000 had been paid, pro rata, to the creditors. Stated is that furthermore, upon conclusion of EBC Guernsey/KPMG litigation case, the liquidator was expected to finalize the liquidation of KBAL
The BoB’s banking supervision department stated that it is responsible for prudential supervision, including investigating unauthorized and illegal deposit-taking activities, improper use of banking names, as well as inappropriate market conduct of financial institutions under its purview, with a view to ensuring fair treatment of customers.
Information contained in the same report, the bank continued to administer abandoned funds in accordance with Section 39 of the Banking Act. As at December 31, 2020, the total abandoned-funds balance was P17 674 953. During the year, claims amounted to P258 154, while P2 017 768 was transferred to the Guardian’s Fund.