Members of Parliament welcome banking amendments
12 Apr 2023
The proposed holistic review of the Banking Act to enable licensing, regulation and supervision of banks and deposit-taking institutions and further promote safety and soundness of banks in the country has received overwhelming support from legislators across the political divide.
Minister of Finance, Ms Peggy Serame on Tuesday presented the Banking Bill of 2023 for second reading in Parliament, which proposed holistic and comprehensive review to address several strategic objectives as well as align the country’s regulatory and supervisory standards to the changing nature of both domestic and international financial systems.
Debating the proposed amendments, Member of Parliament for Kanye North, Mr Thapelo Letsholo hailed it as a progressive move as it would also allow for the establishment of digital banking.
“This will allow innovations in the banking sector, which has been low in the country despite other countries benefitting economically from it.
I also urge government to consider other progressive measures such as sandbox, which is whereby banks are allowed to trial some innovations before being rolled out for usage by the public,” Mr Letsholo said.
He also said the proposals to seek permission from the Central Bank before declaring, paying or transferring dividends abroad was a good idea as it would prevent foreign banks from fleeing in anticipation of any trouble.
“It should however be ensured that such a provision is not abused by the Central Bank to meddle into the ordinary affairs of private banks,” he warned.
Francistown West MP, Mr Wynter Mmolotsi said the banking sector was one sector that Batswana were willing to venture into, but had been hampered by its stringent requirements.
“The start-up capital requirement is as high as P5 million.
How many Batswana can afford that, let alone just a million.
This hampered even the most experienced bankers who might have wanted to retire and plant their experience into private investment,” Mr Mmolotsi said.
For his part, Tonota MP, Mr Pono Moatlhodi said even though he supported the proposals, he had discomfort in that about 98 per cent of the amendments were focused on the Central Bank.
“We should have ensured that the Central Bank does not just wait for banks to provide information, but go out and sniff out for any anomalies,” Mr Moatlhodi said.
He also indicated that most banks in Botswana were only located in urban areas, seemingly neglecting rural areas that where most populations, which also needed banking services and financial education were located.
The legislator for Okavango, Mr Kenny Kapinga also supported the proposals, but was of the view that government should be wary of too much nationalism in support of the establishment of citizen-owned private banks.
Mr Kapinga said diversity of nationalities was also important.
“This will allow easy acceptance of citizen established banks internationally.
It will guarantee better success. We have seen too much nationalism failing in other countries, and we do not want to fall into the same pit,” he said.
For her part, Ms Talita Monnakgotla, MP for Kgalagadi North, called upon banks to intensify financial literacy through workshops and other means, particularly in rural areas.
Ms Monnakgotla said that was because people in rural areas did not have much financial literacy, especially in the current era of Internet banking, making them easy prey to fraudsters.
“In the past such was common. It is a pity that banks seem to be focused only on people with lots of money while neglecting the rest,” she said. ENDS
Source : BOPA
Author : Olekantse Sennamose
Location : Gaborone
Event : PARLIAMENT
Date : 12 Apr 2023