BoB cracks whip

SHARE   |   Monday, 25 July 2016   |   By Kabelo Adamson
BoB Governer Linah Mohohlo BoB Governer Linah Mohohlo

Financial institutions under the jurisdiction of Bank of Botswana are reported to have been compliant with requirements during 2015; this is according to the Banking Supervision annual report released by the central bank this week. In the report, the BoB Governor Linah Mohohlo says where incidences of non-compliance occurred, corrective measures were made. The central bank in 2015 supervised 10 commercial banks and three statutory banks as well as 57 bureau de change. After imposing a two year moratorium on bank charges which came to an end in December 2015, it is said that none of the banks submitted their tariff schedule for review except one newly licensed bank which submitted its initial tariff structure for approval in February 2016. The central said it however continued to receive applications for introduction of new products and services, including related charges.

After engaging a third party at the expense of banks to investigate whether the fees and charges levied by banks were as approved and in accordance with published tariffs, it was found that all banks, except two, had not levied charges as approved by the central bank and as per their tariff guides. Though the names of the non-compliant banks are not disclosed in the supervision report, the central bank says it decided that, in all cases where the violations had been noted, the concerned banks should identify and reimburse the affected customers. BoB lifted the moratorium on bank charges in January this year, on a case by case basis, subject to each bank fully normalising its violations. The bank insists that it will carry out an assessment as to whether each bank has appropriately reimbursed its customers.The central bank further carried investigations on commercial banks to found out if they were in compliance with the monetary policy decision of February 18, 2015 that cut the lending and deposits interest rates in line with the adjustment of the Bank Rate.

It was however found that four banks complied fully with the decision, two were partially compliant while two totally ignored the decision with a follow up by the regulator later in during period found that all the necessary interest rate changes had been made and back-dated to 19 February 2015. Two banks were found guilty of violating the Banking Act during 2015, with violations ranging from submission of incorrect and misleading data and granting employees unsecured facilities in excess of annual gross remunerations. And as a corrective measure BoB says it levied monetary penalties on the offenders. The banks under the supervision of the central bank are said to have fulfilled requirements in term of corporate as the board and senior management of all commercial banks met satisfied all the requirements in terms of composition and experience.

The supervision report says all appointed officials were found to be “fit and proper” in accordance with the relevant legislation, guidelines and international best practice. During 2015, the central bank says it received 46 applications for appointment to boards as well as senior management positions and out of that number two were rejected. Half of the appointments are to have been for Botswana citizens. Of the 44 appointments approved, two are said to have been for the positions of Managing Director and for board chairmanship.