ARRANGEMENT OF SECTIONS
1. Short title
Establishment, Constitution and Objectives
3. Establishment of central bank
4. Principal objectives of Bank
Capital, Profits and Reserves
7. General Reserve
Board, Management and Staff
8. Establishment and powers of Board
9. Membership of Board
10. Other members of Board
12. Meetings and quorum of Board
13. Governor and Deputy Governors
15. Disqualification and removal from office
17. Appointment of officers, employees, agents and correspondents
18. Conflicts of interest
Monetary Unit, Notes and Coins
20. Monetary unit
21. Exchange rate
22. Sole right to issue notes and coins
23. Notes and coins to be legal tender
24. Manufacture and characteristics of notes and coins
25. Power to recall currency
26. Exchange of notes and coins
27. Penalty for mutilation of notes
28. Recovery of lost or stolen notes and coins
29. Counterfeiting, forgery, etc.
30. Authority to transact foreign exchange business
31. Primary International Reserve
32. Adequacy of Primary International Reserve
33. Operations in foreign exchange
35. Long term investment funds
Relations with Financial Institutions
36. Opening accounts for domestic financial institutions, etc.
37. Opening accounts for other institutions, etc.
38. Operations with account holders
39. Determination of rates for discounts and advances
40. Primary reserve requirements
41. Regulation of interest and credit
42. Maximum amounts of foreign currency holdings or loans
43. Clearing facilities
Regulation of Companies which have Applied for or been Issued with a Tax Certificate
47. Supervisory and inspection powers
48. Power to inspect
49. Recommendations of Bank
50. Disclosure of information
51. Levying of fees
Relations with Government
54. Banker, fiscal agent of and adviser to Government
55. Bank depository of Government funds
56. Management of Government securities
57. Agency functions
58. Banker and fiscal agent to Government boards and agencies
59. Borrowings by Government and public bodies, etc.
60. Advances to Government
61. Transactions in Government securities
62. Limitation on lending to Government
63. Agent for the administration of exchange control
64. Depository and fiscal agency for international financial organizations
65. Policy directives by President
Accounts, Financial Statements and Financial Year
66. Accounts, financial statements and financial year
68. Annual report and monthly return
69. Prohibited activities
70. Bank may call for information
71. Exemption from Banking Act
72. Exemption from taxes, etc.
74. Repeal and saving
Act 19, 1996,
Act 19, 1999,
Act 2, 2007.
An Act to provide for the establishment of the Bank of Botswana, its constitution, objectives and powers; to regulate the issue of Bank notes and coins; to provide for certain matters connected with banking, currency and coinage, and for matters connected therewith and incidental thereto.
[Date of Commencement:1st January, 1997]
Preliminary (ss 1-2)
This Act may be cited as the Bank of Botswana Act, 1996.
In this Act, unless the context otherwise requires-
"Bank" means the Bank of Botswana established under section 3;
"Board" means the Board of the Bank established under section 8;
"Deputy Governor" means a deputy governor appointed under section 13;
"financial institution", "bank" and "licensed" shall have the same meanings ascribed thereto under the Banking Act;
"Governor" means the Governor of the Bank appointed under section 13;
"legal tender" means currency which, legally, cannot be refused to settle debt or to effect payment at an agreed price;
"member" means a member of the Board and includes the Governor;
"officer" means an employee of the Bank who is authorized by the board to sign legal or other documents on behalf of the Bank;
"public issue" means any financial instrument issued or guaranteed by Government, which members of the public are eligible to hold.
Establishment, Constitution and Objectives (ss 3-4)
(1) There is hereby established a central bank, to be known as the Bank of Botswana, which shall be a body corporate with perpetual succession and a common seal, capable of suing and being sued in its corporate name and which, subject to the provisions of this Act, may hold and dispose of movable and immovable property and do all such other things as are necessary for or conducive to the proper carrying out of its objectives and the performance of its functions.
(2) The Bank shall have its head office in Gaborone and may establish branches in Botswana and, with the approval of the Minister, abroad, and may appoint agents and correspondents in Botswana and abroad.
(1) The principal objectives of the Bank shall be-
(a) first and foremost to promote and maintain monetary stability, an efficient payments mechanism and the liquidity, solvency and proper functioning of a soundly based monetary, credit and financial system in Botswana;
(b) secondly, in so far as it is not inconsistent with the objectives set out in paragraph (a), to foster monetary, credit and financial conditions conducive to the orderly, balanced and sustained economic development of Botswana; and
(c) thirdly, to assist insofar as it is not inconsistent with the objectives as set out in paragraphs (a) and (b), in the attainment of national economic development goals.
(2) In the attainment of the objectives set out in subsection (1), the Bank shall have and may exercise all the powers generally conferred upon a central bank.
Capital, Profits and Reserves (ss 5-7)
(1) The authorized capital of the Bank shall be P25 000, 000.
(2) Government shall be the sole subscriber to and holder of the capital of the Bank, and its holdings of such capital shall not be transferable in whole or in part or be subject to any encumbrance whatsoever.
(3) Whenever the assets of the Bank are less than the sum of its liabilities and capital, the Minister, notwithstanding the provisions of any other written law, shall cause to be transferred to the ownership of the Bank non-negotiable non-interest bearing Government securities for such amount as is necessary for the purpose of preserving such capital from any impairment, which securities shall be a charge on the Consolidated Fund.
(1) At the end of each financial year of the Bank, the Bank shall transfer any net profits from its operations to the Government in accordance with a schedule to be agreed between the Bank and the Minister after-
(a) meeting all expenses for such year;
(b) making provision for bad and doubtful debts;
(c) making provision for depreciation of physical assets;
(d) making provision for pensions, gratuities and other benefits for its officers and employees;
(e) making provision for such other items as the Board may deem necessary;
(f) making good the issued capital and General Reserve balances; and
(g) deducting any amounts due and payable to the Bank by the Government.
(2) Any net losses incurred by the Bank in any financial year shall, after the Bank has advised Government thereof, be charged first to the General Reserve and then to the Capital.
(3) In determining profits and losses at the end of the financial year, the Bank shall clearly distinguish profits and losses arising from normal operations and profits and losses arising from exchange fluctuations.
(1) The Bank shall establish and maintain a General Reserve sufficient to enable it to accomplish its principal objectives, the amount of which General Reserve shall be determined from time to time by the Board in consultation with the Minister.
(2) The Bank may transfer, to the General Reserve, funds from other reserve accounts which it maintains.
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