07 Jun 2018

A presentation on the Banking Amendment Bill by finance and economic development minister Mr Kenneth Matambo was on June 6 received with great positivity by MPs, most of whom lauded government for being proactive to its anti-money laundering campaign.

Debating the bill, Vice President Mr Slumber Tsogwane labelled the bill as a critical piece of legislation that would align the Banking Act with international banking regulations.

The vice president, who is also Boteti West MP, said the bill was also important in that it would harmonise the Banking Act and the Financial Intelligence Agency (FIA) Act; a process which he indicated would do away with the possibility of the duplication of efforts between the two pieces of legislation as well as to ensure that they did not speak against each other.
MP for Gaborone Bonnington South Mr Ndaba Gaolathe also noted how necessary the amendments were.

He however indicated that he had expected more amendments to have been included; among those being the relaxing of the stringent regulation of the country’s banking sector.
Mr Gaolathe observed that as things presently were, the Banking Act was too stringent and restrictive in terms of the setting up of banking entities, a status quo that he said did not encourage the setting up of indigenous banking entities.

He said should that be addressed, the landscape of Botswana’s banking sector would completely change as even the indigenous group savings schemes commonly known as metshelo would be able to evolve into international banking entities as they carried the potential to achieve such a feat.

Mr Gaolathe further pointed out that there was a subtle requirement in the Banking Act for aspiring banking entities to have in place a strategy for a branch network roll-out.
Such a requirement, he said, was also an impediment as it overlooked the fact that some banking entities could still add great value to the economy while existing and operating as single-branch entities.

The MP also highlighted the need to strike some balance in the shareholding of some banking entities, observing that while it was clear that the banking sector was a key aspect of any economy, it was crucial that no country had a banking sector that was unduly predominantly foreign-owned.

In light of this, Mr Gaolathe said a banking charter that would stipulate a minimum shareholding by locals was therefore necessary.

Specially Elected MP Ms Bogolo Kenewendo also supported the bill, proposing however that the issue of crypto-currency also be looked into carefully in terms of how the laws would deal with it.

In addition, Ms Kenewendo who is also the Minister of Investment, Trade and Industry said it was vital to also look into online payment platforms, which she said were a potential channel for the finding of terrorist acts.

For his part, Selebi Phikwe West legislator Mr Dithapelo Keorapetse emphasised the need for Botswana to revamp her anti-graft laws and at the same time enhance the capacity, coverage and visibility of its anti-corruption agencies such as the DCEC.

He said the country needed to be guided by codified anti-money laundering laws, adding nonetheless that more emphasis should be on the prevention of all types of corruption.
MP for Gaborone Bonnington North Advocate Duma Boko sought to understand the rationale through which the FIA would request information on an individual suspected of performing suspicious transactions.

Adv. Boko also wanted to know whether a person in respect of whom such information was sought would be informed that their transactions were being looked into.
Such questions, he pointed out, needed to be asked as such scrutiny into people’s transactions was tantamount to the invasion of their privacy, which he said had been guaranteed under Section 9 of the Constitution.

MP Tawana Moremi of Maun West observed that the authority by FIA to scrutinise and gather information on people’s transactions had the potential for abuse and could thus be used to victimise opponents particularly in politics.

MP Moremi also indicated that the provision for public officers to engage in businesses likewise needed to be kept in check as it was similarly liable to abuse.

He said if given a lot of latitude, such engagement in business could result in some collusion between the public officers and business entities including parastatals.

When presenting the bill, Minister Matambo had indicated that the object of the bill was to amend the Banking Act in order to harmonise Botswana’s banking legislation with international standards, in particular the Financial Action Task Force (FATF) recommendations on anti-money laundering and combatting the financing of terrorism.

Mr Matambo said stated that one of the amendments would include FIA as one of the entities allowed to request for customer information from commercial banks. He said FIA was currently not included in the Banking Act, pointing out that this impeded the agency from carrying out its work due to bank secrecy provision.

The minister said the proposed amendments were meant to enhance confidence in Botswana’s financial system. Ends