04 Dec 2019

Parliament has been told that nine licensed commercial banks are operating in Botswana.

Minister Finance and Economic Development, Dr Thapelo Matsheka said all the nine commercial banks licensed and operating in Botswana were majority-owned subsidiaries of banks originating in countries such as South Africa, India, Malawi, Namibia and the United Kingdom.

The nine banks are Barclays Bank of Botswana Limited, First National Bank of Botswana Limited, Stanbic Bank Botswana Limited, Standard Chartered Bank Botswana Limited, Bank Gaborone Limited, African Banking Corporation of Botswana Limited (Banc ABC), Bank of Baroda (Botswana) Limited and Bank SBI (Botswana) Limited.

He further noted that no indigenous banks were operating in Botswana.

He, however, said some of the commercial banks such as African Banking Corporation of Botswana Limited, Barclays Bank of Botswana Limited, First National Bank of Botswana Limited and Standard Chartered Bank Botswana Limited were listed on the Botswana Stock Exchange.

“Therefore, Batswana, either in their own name or through institutional investors or their companies, own a part of these banks through buying shares in the stock market,” he said.

Minister Matsheka said Bank of Botswana had over the years received banking license enquiries and applications from citizens and accordingly evaluated such applications against the established licensing criteria.“Since 2013, Bank of Botswana received six applications for a banking license from locally incorporated and citizen-owned companies which were not successful as they were assessed not to meet the minimum licensing requirements enshrined in the Banking Act (Cap. 46:04), Regulations and Licensing Policy,” he said.

He further explained that the reasons for the rejection of the applications were varied and each applicant was duly informed with the proposal to use debt and/or highly leveraged balance sheet as capital

He said other reasons included the inability to demonstrate the availability of own funds as backup capital for the sustainability of operations and complicated ownership structures which impeded effective supervision or likely to undermine the safety, soundness and integrity of the Botswana banking system.

Dr Matsheka also cited unfavourable vetting outcomes on the fitness and propriety of key proposed board or senior management persons and the proposed strategic and operating plans, including financial projections not commensurate with the financial strength of the proposed bank.

He said ownership structure and governance arrangements, including fitness and propriety of board members and senior management, was also a factor.

On assessment, the minister said Bank of Botswana determined that submissions on the above measures were not suitable on the proposed banking business.

Selebi-Phikwe West MP, Mr Dithapelo Keorapetse had asked the names and number of commercial banks licensed and operating in Botswana.

He also wanted to know the origin of the parent companies and the banks owned by indigenous Batswana and/or other companies.

Mr Keorapetse had also asked the minister the number of Batswana who had applied for banking licenses and the responses to their applications. ENDS