BANKING ACT
ARRANGEMENT OF SECTIONS
SECTION
PART I
Preliminary
1. Short title and commencement
2. Interpretation
3. Application of the Act
PART II
Licensing Banks and Deposit-Taking Institutions
4. Authority to transact banking business or deposit-taking activities
5. Restriction on use of the word "bank"
6. Foreign bank representative office
7. Investigation of unlicensed banking or deposit-taking
8. Application for banking or deposit-taking licence
9. Processing of applications
10. Grant of licence
11. Refusal to grant licence
12. Display of licence
13. Conditions of licence
14. Power to vary conditions of licence
15. Revocation and surrender of licence
16. Procedure in case of urgency
17. Branches and subsidiaries
18. Prohibition of branches of foreign banks
19. Permissible activities
20. Mergers, acquisitions and registration of controlling companies
21. Transfer of significant or controlling interest
PART III
Capital Structures
22. Capital requirements
23. Restriction on payment of dividends
24. Provision to be made for certain items
25. Liquidity management in banks and deposit-taking institutions
26. Prudential requirements
PART IV
Limitations on Specified Operations and Activities
27. Maximum amounts of foreign currency holdings or loans
28. Limitations on large exposures and concentration of risks
29. Limitations on advances or credit
30. Limitations on investments in non-banking operations
PART V
Financial Statements, Audit of Accounts
31. Financial records
32. Annual accounts
33. Supervisory reporting
34. Request for information by Central Bank
35. Appointment of independent external auditor
36. Disqualification of independent external auditor
37. Duties of independent external auditor
PART VI
Supervision of Banks, Banking Groups, Deposit-Taking Institutions and Conglomerates
38. Examination of banks and deposit-taking institutions
39. Powers of bank examiners
40. Power of Central Bank after examination
41. Banking supervision annual report
42. Consolidated supervision
43. Bank recovery plans
44. Corrective measures
45. Early intervention measures
PART VII
Corporate Governance of Banks and Deposit-Taking Institutions
45A. Corporate governance oversight
46. Board composition and conduct of directors
47. Fit and proper person
48. Disqualification to hold office
49. Disclosure of interest by director
50. Offences by directors, senior management, employees and agents
51. Composition of committees
52. Audit committee
53. Risk committee
54. Remuneration committee
55. Credit committee
55A. Nomination committee
56. Internal audit function
57. Internal compliance function
58. Risk management function
PART VIII
Resolution Measures
59. Resolution authority
60. Bank resolvability assessment
61. Bank resolution planning
62. Resolution funding
63. Commencement of bank resolution
64. Objectives and tasks under resolution
65. Appointment of official administrator
66. Powers and duties of official administrator
67. Inventory of assets and liabilities and plan of action
68. Resolution measures
69. Suspension of payments and termination rights during official administration
70. Creditor safeguard
71. Shareholder safeguard
72. Termination of bank resolution
PART IX
Liquidation
73. Appointment of liquidator under compulsory liquidation
74. Notice of liquidation
75. Prohibition against accepting deposits
76. Powers and duties of liquidator
77. Moratorium during liquidation
78. Transfer of assets and liabilities
79. Termination of certain contracts
80. Filing and notice of claims
81. Objections
82. Distribution related to liquidation
83. Avoidance of pre-liquidation transactions
84. Order of priority in payment of claims
85. Remaining assets
86. Final reporting on liquidation
87. Procedures for voluntary liquidation
88. Notice and publication of voluntary liquidation
89. Rights of depositors and creditors
90. Distribution of assets
91. Insufficient assets
PART X
Appeals
92. Appeals Tribunal
93. Appeals
94. Proceedings of Appeals Tribunal
95. Appeal to High Court
PART XI
Miscellaneous Provisions
96. Abandoned funds
97. Evidence in relation to banker's books
98. Biometric validation
99. Controlling of advertisements
100. Confidentiality of information
101. Hours of business
102. Publication of information
103. Bank holidays
104. Application of other laws
105. Immunity of Central Bank
106. Recovery of administrative penalties
107. Annual submissions
108. General penalty
109. Regulations
110. Repeal of Cap. 46:04
111. Savings and transitional provisions
Act 8, 2023.
An Act to provide for the licensing, regulation and supervision of banks and deposit-taking institutions and to promote safety and soundness of banks and for matters incidental thereto.
[Date of Commencement: ON NOTICE]
PART I
Preliminary (ss 1-3)
1. Short title and commencement
This Act may be cited as the Banking Act, and shall come into operation on such a date as the Minister may, by Order published in the Gazette, appoint.
Unless the context otherwise provides—
"affiliate" means any person owning or having the power to vote 20 per cent or more of any of the outstanding shares of any class of the voting shares or other voting participation, or having the power to exercise influence over the management, policies and day to day operation, of another person;
"Agency" has the same meaning assigned to it under the Financial Intelligence Act (Cap. 08:07);
"agent" in relation to a bank or deposit-taking institution, means a right granted to a person by that bank or deposit-taking institution to receive on its behalf from its clients any deposits, money due to it or applications for loans or advances, or to make payments to such clients on its behalf or to perform any function or activity as may be approved by the Central Bank;
"bail-in" means a resolution measure that empowers an official administrator to help a bank on the brink of non-viability, by requiring cancellation of debts owed to creditors and unsecured depositors, or converting debt instruments to equity;
"bank" means a person, including a subsidiary of a foreign bank, which is licensed under this Act to engage in banking business, and does not include the Central Bank;
"banking business" means the business of—
(a) accepting deposits of money from members of the public withdrawable or payable, by cheque or otherwise, upon demand or after a fixed period or after notice;
(b) using those monies, in whole or in part, to fund credits or investments for the account and at the risk of the person accepting those deposits, including discounting of commercial paper, securities and other negotiable instruments, whether or not such business is conducted in a home office, a branch of a bank or an agency; or
(c) the soliciting of or advertising for deposits;
"banking group" means a bank, its affiliates, and any other entities that the Central Bank determines by, regulation or directive, for the purpose of consolidated supervision;
"beneficial owner" has the same meaning assigned to it under the Financial Intelligence Act;
"board of directors" in relation to a bank or deposit-taking institution, means the highest body of authority in a bank or deposit-taking institution responsible for the governance and setting the operating strategy for the bank or deposit-taking institution, effectively monitoring management and properly accounting to shareholders;
"branch" means any premises that form a legally dependent arm of a bank that is not separately incorporated, at which a bank transacts banking business in or outside Botswana;
"bridge bank" means a bank established under section 68(5) to take over and continue viable operations of a bank in official administration;
"capital" means a bank or deposit-taking institution's own funds, paid in by owners, shareholders, retained earnings and such other funds freely available to absorb losses, as shown in the books of the bank or deposit-taking institution, determined in accordance with International Financial Reporting Standards, after deducting the amount thereof attributable to capital instruments, including stock that are subject to—
(a) a legal or technical covenant, term, restriction or encumbrance that would cause the amounts attributable to those capital instruments not to be freely available for distribution to depositors or other creditors in the event of the liquidation or dissolution of the bank or deposit-taking institution; or
(b) any condition or arrangement which would, in the opinion of the Central Bank, diminish the value of the whole or any portion of the capital of the bank or deposit-taking institution;
"Central Bank" means the Bank of Botswana, as established under the Bank of Botswana Act (Cap. 55:01);
"close relative" in relation to any person, means—
(a) a spouse;
(b) a brother, a sister, a child, a stepchild, a parent or step-parent; or
(c) the spouse of any of the persons mentioned in paragraph (b) above;
"company" has the same meaning assigned to it under the Companies Act (Cap. 42:01);
"conglomerate" means a group of companies whose members include a bank;
"consolidated supervision" means a quantitative and qualitative assessment of the overall strength of a group or conglomerate to which a bank belongs, to evaluate the potential impact of other companies in the group on the bank;
"control" means a relationship where a person or group of persons acting in concert, as determined by the Central Bank by order, directly or indirectly—
(a) owns a majority of the shares of a bank, deposit-taking institution, a banking group or an affiliate of a banking group;
(b) has the power to appoint or remove the majority of the board of directors of a bank, deposit-taking institution or a member of a banking group; or
(c) has the ability to exert a controlling influence on the management or policies or day-to-day operations of a bank, deposit-taking institution or a member of a banking group;
"controlling company" means a company that has control over a bank or deposit-taking institution licensed under this Act;
"controlling interest" means an interest that permits the holder or owner to elect, name or place into office a majority of the directors or senior managers of a bank or deposit-taking institution;
"core capital" of a bank means permanent shareholders' equity in the form of issued and fully paid-up shares of common shares, share premium, eligible revenue reserves audited retained earnings and such other funds as the Central Bank may, by regulation, permit a bank to treat as core capital;
"correspondent banking services" means the provision of banking services by one bank to another bank, where neither of the banks is a shell bank or has a relationship with a shell bank;
"credit" means any disbursement or commitment to disburse a sum of money supported by a right to repayment of the amount disbursed and outstanding and to payment of interest or other charges on such amount, whether designated as an advance, loan, financial guarantee, assumption of liabilities, a bond or commitments of similar nature;
"credit bureau" has the same meaning assigned to it under the Credit Information Act (Act No. 17 of 2021);
"deposit" means a sum of money—
(a) paid by one person to another person denominated in Botswana Pula or any other recognised currency; and
(b) subject to an agreement in terms of which an equal amount or any part thereof may be conditionally or unconditionally repaid by the person to whom the money has been paid—
(i) with or without interest or premium,
(ii) either on demand or at specified or unspecified time, and
(iii) in circumstances agreed by or on behalf of the persons making the payments and the person receiving such payment,
and such deposit is not referable to the provisions of property or services, other than the transmission of money by mobile telephone or electronic system or other giving of security to be rendered;
"deposit-taking institution" means a company, other than a bank which is licensed under this Act to engage in the business of accepting deposits from members of the public;
"director" means an individual who is a member of the board of directors of a bank or deposit-taking institution;
"eligible financial contract" means any type of financial contract from time to time specified by the Central Bank for such purpose;
"foreign bank" means a bank that is incorporated or head office of which resides outside Botswana and authorised and regulated as a bank under the laws of the country in which it is incorporated or has its head office;
"independent director" means an individual who is neither a shareholder, a representative of a shareholder, an employee of a bank or deposit-taking institution or its related entity or a bank holding company;
"liquid assets" means freely transferable assets, unencumbered by any charge or lien whatsoever, including Treasury Bills and other securities issued by the Government or the Central Bank itself, negotiable instruments of such types as the Central Bank may approve;
"major acquisition" means where a bank or deposit-taking institution acquires 10 per cent and above of the issued common shave capital of an entity;
"money laundering" has the meaning assigned to it under the Proceeds and Instruments of Crime Act (Cap. 08:03);
"net termination value" means the net amount obtained after setting off the mutual obligations between the parties to an eligible financial contract in accordance with its provisions;
"netting clause" means a clause that enables the conversion into one net claim or one net obligation of claims and obligations resulting from transfer orders which a participant or participants, whether or not on a settlement system, either issues to, or receives from, one or more other participants in that system with the result that only a net claim or a net obligation remains; and
"official administrator" means a person appointed by the Central Bank under section 65;
"physical presence" means the presence of board members of a bank or deposit-taking institution and staff comprising of senior management of a bank or deposit-taking institution within a country:
Provided that the existence of a local agent acting on behalf of a bank or deposit-taking institution or the presence of any employees who are not in management positions shall not constitute physical presence;
"place of business" means any branch, office or agency, including a mobile agency, of a bank or deposit-taking institution in Botswana, open to the public for the transaction of banking business or deposit-taking activities;
"principal officer" in relation to a bank or deposit-taking institution in Botswana, means the chief executive officer, or other person, by whatever title he or she may be referred to, who is subject to the directions of the board of directors, responsible for the day to day management of the affairs of the bank or deposit-taking institution and participating in major policy making function of the bank or deposit-taking institution;
"related party" means any person that maintains with a bank or deposit-taking institution at least one of the following relationships—
(a) any director, principal officer, senior manager, or significant shareholder of the bank or deposit-taking institution or of any affiliate of the bank or deposit-taking institution;
(b) any close relative of a director, principal officer, senior manager or significant shareholder of the bank or deposit-taking institution or of any affiliate of the bank or deposit-taking institution;
(c) any legal person in which a director, principal officer, senior manager, or significant shareholder of the bank or deposit-taking institution or of any affiliate of the bank or deposit-taking institution is also a director, principal officer, senior manager or significant shareholder or has a significant interest;
(d) any person who has a significant interest in a legal person in which the bank or deposit-taking institution or of any affiliate of the bank or deposit-taking institution has a significant interest;
(e) any affiliate of the bank or deposit-taking institution; or
(f) any other person who exercises control or influence over the management or policies of the bank or deposit-taking institution, or is otherwise involved in a relationship which the Central Bank may, by regulation or order, determine to be a related party of the bank or deposit-taking institution;
"representative office" means an office of a foreign bank that is not engaged in banking business and does not accept deposits;
"senior manager" means the chief financial officer, chief operating officer, chief accountant and chief risk officer of the bank or deposit-taking institution and any person, other than a non-executive director, who reports directly to the board and principal officer or participates or has authority to participate in major policymaking functions of the bank or deposit-taking institution or exerts influence in the granting or denial of credit and other accommodation by the bank or deposit-taking institution;
"shell bank" means a bank which has no physical presence in the country in which it is incorporated and licensed, and which is unaffiliated with a regulated financial group that is subject to effective supervision;
"significant interest" means a direct or indirect holding of an interest in a legal person, alone or in concert with another person—
(a) that represents five per cent or more of its outstanding voting shares; or
(b) the exercise of a significant influence, as determined by the Central Bank, over that legal person;
"significant shareholder" means a person that owns, directly or indirectly, including but not by way of limitation, legal and beneficial owners, alone or in concert with another person, a significant interest in a legal person;
"solo" in relation to financial accounts, means books of a single company;
"subsidiary" means a legal person in which another person or group of persons acting in concert owns, directly or indirectly—
(a) 50 per cent or more of the outstanding voting shares, or any class; or
(b) a significant interest which enables such person or group of persons to exercise control over the legal person;
"supervisory authority" has the meaning assigned to it under the Financial Intelligence Act;
"supplementary capital" means capital of a bank or deposit-taking institution maintained in accordance with the principles established by the Central Bank in regulation in excess of core capital;
"systemically important bank" means a bank, as determined by a methodology determined by the Central Bank, whose failure may result in significant disruption to the essential services provided to the banking system and the overall economy, due to its size, cross-jurisdictional activities, complexity and lack of substitute and interconnection;
"tier" in relation to a bank, means a class or category of banks based on their relative size to the overall banking market and nature of permissible business;
"unimpaired" in relation to the capital of a bank or deposit-taking institution, means the absence of any legal or technical covenant, term, restriction or encumbrance which would otherwise render such capital not to be freely available for distribution to depositors or other creditors in the event of a liquidation or dissolution of the bank or deposit-taking institution, and the absence of any condition or arrangement which would, in the opinion of the Central Bank, diminish the value of the whole or any portion of the capital of the bank or deposit-taking institution;
"unsecured" in relation to loans, advances or credit facilities, means loans, advances, or credit facilities granted without security or in relation to loans, advances or credit facilities granted against security, means any part of such loans, advances, or credit facilities which at any given time exceeds the market value of the assets comprising the security given, or which exceeds the valuation approved by the Central Bank whenever it deems that no market value exists for such assets; and
"write-down" means the reduction of the value of an asset for the purposes of off-setting a loss or expense.
(1) The provisions of this Act shall apply to a bank, banking group and deposit-taking institution.
(2) Notwithstanding subsection (1), where a certain institution is authorised to engage in banking business under powers conferred by any other legislation, then, unless otherwise prescribed, and notwithstanding such other legislation, the provisions of this Act governing the examination of banks and, more generally, those provisions ensuring safety and soundness in banking, apply to such institution.
(3) The provisions of this Act shall not apply to the Central Bank, except in so far as this Act confers upon the Central Bank powers to perform the functions specified herein.
PART II
Licensing Banks and Deposit-Taking Institutions (ss 4-21)
4. Authority to transact banking business or deposit-taking activities
(1) A person shall not transact banking business or engage in deposit-taking activities without a valid licence issued by the Central Bank.
(2) Any person who transacts banking business or engages in deposit-taking activities without a licence commits an offence and is liable to a fine not exceeding P1 000 000 or an imprisonment term not exceeding five years or to both.
5. Restriction on use of the word "bank"
(1) No person, other than a bank licensed under this Act, shall, without the prior approval of the Central Bank—
(a) use, in any language, the word "bank", or any translation of its derivatives, as part of the name, description or title under which he or she conducts his or her activities;
(b) use, as part of the name, description or title under which he or she carries on his or her activities, any word or term indicating that the nature of his or her activities are those of a bank or deposit-taking institution; or
(c) make any representation, or use any word or term in any billboard, letterhead, notice or advertisement, indicating in any manner that he or she is carrying on the activities of a bank or deposit-taking institution:
Provided that a person who has not been granted a licence, may on approval of the Central Bank, use the word "bank" for the sole purpose of forming and incorporating a company with a view to applying for a licence under this Act within six months of incorporating such company.
(2) A person who fails to submit an application for a licence after being granted approval under subsection (1) shall de-register the company.
(3) The provisions of subsection (1) shall not apply where the use of word "bank"—
(a) is included in the title of a staff association or similar organisation representing bank employees, or a recognised association of banks licensed under this Act; or
(b) is composed of other words as part of a place-name or a personal name.
(4) Any person who contravenes this section commits an offence and is liable to a fine not exceeding P50 000 for each day that the offence continues up to a maximum of P1 000 000 or to imprisonment for a term not exceeding five years, or to both.
6. Foreign bank representative office
(1) A foreign bank shall not establish a representative office in Botswana without a licence issued by the Central Bank.
(2) A licence to establish a representative office may be granted to a foreign bank only if such a bank is subject to consolidated supervision by a supervisory authority in the home jurisdiction of the foreign bank, which supervision is in the opinion of the Central Bank adequate.
(3) A representative office licensed in accordance with this section shall be restricted to the following activities—
(a) advertising, marketing and promotion business on behalf of the foreign bank; or
(b) agency services aimed at facilitating business transactions between domestic entities and the foreign bank.
(4) Any bank or a representative office which contravenes subsection (1) or (3) commits an offence and is liable to a fine not exceeding P1 000 000 or to imprisonment for a term not exceeding five years, or to both.
(5) The Central Bank may, at any time, request information from a representative office concerning its operations in Botswana, and any representative office which fails, without good reason, to provide the information requested within a period of 21 days from the date of receiving the request commits an offence and is liable to a fine of P250 000 or to an imprisonment term not exceeding three years or to both.
7. Investigation of unlicensed banking or deposit-inking
(1) Where the Central Bank has reason to believe that a person is advertising for or soliciting deposits or is transacting banking business in violation of this Act, the Central Bank may, in order to ascertain whether the Act is being or has been violated, immediately request for and examine, or cause to be examined, all books, minutes, records, cash, securities and any other documents and items in such person's possession or custody.
(2) The Central Bank shall retain and preserve any such books, minutes, records, cash, securities or other documents, giving to the custodian thereof a duly authorised receipt:
Provided that where cash is held in a bank account, the Central Bank may order the freezing of such an account.
(3) The Bank shall, at the earliest reasonable opportunity, notify the Minister of any action taken pursuant to subsections (1) and (2) stating the reasons therefor.
(4) Any person who without good reason, fails or refuses to comply with any request of, or instructions duly given by the Central Bank under this section, or who destroys or defaces records or otherwise supplies false or misleading information, or who makes any, false entry or omits any statement or entry in such records, commits an offence and is liable to a fine not exceeding P500 000 or to imprisonment for a term not exceeding five years, or to both.
(5) Where, upon investigation, the Central Bank determines that banking business or a deposit-taking activity is being transacted in violation of section 4, the Central Bank shall order such a person to cease and desist from such illegal activities forthwith.
(6) Any person who contravenes any order of cease and desist given pursuant to subsection (5) commits an offence and is liable to a fine not exceeding P500 000 or to imprisonment for a term not exceeding five years, or to both.
(7) The Central Bank shall make an application to the High Court for directions in respect of the disposition of all monies, securities and other assets in the possession of an unlicensed person and obtained by him or her whilst transacting banking business or deposit-taking activities in violation of this section.
(8) The provisions of this section shall be in addition to, and not in derogation of, any criminal liability of such person in accordance with this Act or any other written law.
(9) The Central Bank shall not later than 10 working days after the completion of its investigation and review, report its findings to the Minister.
8. Application for banking or deposit-taking licence
(1) An application for a licence to transact banking business or to engage in deposit-taking activities in Botswana shall be made to the Central Bank in such manner as may be prescribed.
(2) An applicant may appoint a representative in Botswana for the purpose of communicating with the Central Bank as part of the application procedure.
(3) For the purposes of this section, an application for a licence shall be considered to be complete when the Central Bank determines it to be so, and the Central Bank shall give the applicant a written acknowledgement of receipt of the application.
(4) The Central Bank shall, within 30 days of receipt of an application for a licence, inform the Minister of such receipt and that it is duly being processed and the Central Bank shall cause such application to be published in the Gazette, on the Central Bank’s website and in at least two newspapers circulating in Botswana.
(5) The Central Bank may request for such supplementary information as it may require, and shall conduct such investigation as it may deem necessary for the purpose of ascertaining compliance by the applicant with all applicable laws and regulations, including the provisions of this Act.
(6) Where the applicant fails to submit additional or supplementary information as required by the Central Bank, within six months period commencing on the date that the first documents as specified in subsection (1) were submitted to the Central Bank, the Central Bank may declare the application to have been abandoned and the processing fee forfeited.
(7) In the event of any material change in the information provided by the applicant, before the issue of a licence, the applicant shall without delay notify the Central Bank of such a change.
(8) Every document and statement provided to the Central Bank as part of the application, including the supplementary information, other than documents, statements and information that are otherwise public or available to the public, shall be kept and treated by the Central Bank in strict confidence pursuant to the terms of the Bank of Botswana Act (Cap. 55:01).
(9) The Central Bank shall not grant a licence to an applicant unless the applicant is incorporated under the Companies Act and limited by share capital.
(10) The Central Bank shall not licence a shell bank or a non-trading company or any company as a bank, where such a company does not have physical presence in the country or any country and is not regulated or supervised by a financial regulator within its country of origin.
(11) Any person who, in connection with any application for a licence filed under this section, wilfully makes any statement to the Central Bank that is misleading or that he or she knows to be untrue in any respect, or provides any document that is materially misleading or false, commits an offence, and is liable to a fine not exceeding P5 000 000 or to imprisonment for a term not exceeding seven years or to both.
(1) The Central Bank shall, in assessing an application satisfy itself—
(a) with regard to the financial history and status of the applicant, its proposed significant shareholders and beneficial owners;
(b) that the principal officer, directors, senior managers, beneficial owners and significant shareholders are fit and proper persons as provided for in this Act;
(c) with regard to the adequacy of its proposed staffing, its capital structure, its operational and financial resources to cover obligations and liabilities that are likely to be incurred in the conduct of the activities sought to be licensed;
(d) with regard to the adequacy of proposed risk management policies and systems, internal controls, audit procedures and corporate governance practices;
(e) that the ownership structure of the applicant will not hinder effective supervision; and
(f) with regard to the viability of its business plan and soundness of its proposed operations.
(2) Where an applicant wishes to withdraw an application before a decision is made, it shall do so in writing to the Central Bank, stating reasons therefor.
(3) Upon receipt of the notice of withdrawal, the Central Bank shall notify the Minister and the Minister shall cause the notice to be published in the Gazette, at least two newspapers of general circulation in Botswana and on the Central Bank's website.
(1) Where the Central Bank is satisfied that the applicant meets the requirements set out in sections 8 and 9, the Central Bank shall, by written notice to the applicant, and on payment of such licence fee by the applicant as may be prescribed, grant to the applicant a licence to transact banking business or to engage in deposit-taking activities in Botswana.
(2) Where the Central Bank grants a licence to an applicant under subsection (1) it shall give notice thereof in the Gazette, and at least two newspapers of general circulation in Botswana and on the Central Bank’s website.
(3) A licence issued under this section shall be perpetual, subject to such conditions as may be imposed by the Central Bank and payment of an annual fee as may be prescribed.
(1) The Central Bank may refuse to grant a licence where—
(a) the applicant does not meet the requirements set out in sections 8 and 9; or
(b) it is in the public interest in order to advance the Central Bank’s objectives.
(2) Where the Central Bank refuses an application for a licence, the Central Bank shall notify the applicant of such rejection in writing providing reasons therefor and shall at the earliest opportunity, notify the Minister of the refusal.
(3) Where the Central Bank refuses an application for a licence under this section, the Minister shall cause for a notice of refusal to be published in the Gazette, and in at least two newspapers of general circulation in Botswana and on the Central Bank’s website.
(4) An applicant for a licence may, within six weeks after receipt of notice of refusal of such application, appeal the decision of such denial to the Appeals Tribunal established under section 93 of the Act.
(5) An applicant for a licence may, within six months of refusal to grant a licence by the Central Bank or denial of an appeal by the Appeals Tribunal, re-submit an application for the licence, failing which the applicant shall de-register the company bearing the name "bank".
(6) Any person who fails to de-register a company bearing the name "bank" commits an offence and is liable to a fine not exceeding P50 000 for each day that the offence continues up to a maximum of P5 000 000 or to imprisonment for a term not exceeding seven years, or to both.
A bank or a deposit-taking institution shall at all times display, in a conspicuous place of its principal place of business, and in any other office, branch or site, including a mobile site, a certified copy of the licence granted by the Central Bank.
(1) The Central Bank may impose such conditions as it considers necessary to a licence issued under this Act.
(2) Notwithstanding the generality of subsection (1), a bank or a deposit-taking institution shall not—
(a) without the prior written approval of the Central Bank, use or refer to itself as or transact business under a name other than that under which it is licensed;
(b) without the prior written approval of the Central Bank, engage in any business other than the activity or business for which it is licensed; or
(c) transfer a licence.
(3) Any bank or a deposit-taking institution that contravenes the provisions of subsections (1) and (2) commits an offence and is liable to a fine not exceeding P5 000 000 or to imprisonment for a term not exceeding seven years, or to both.
14. Power to vary conditions of licence
(1) The Central Bank may, by notice in writing inform a bank or a deposit-taking institution, that it intends to impose, amend, add to, vary or cancel any condition attaching to the licence of the bank or deposit-taking institution.
(2) A bank or a deposit-taking institution may, within seven working days of receipt of the notice specified in subsection (1), make representations in writing to the Central Bank.
(3) The Central Bank may, after giving due consideration to any representations made under subsection (2), take such action in accordance with its intention notified in accordance with subsection (1), and shall so notify the bank or deposit-taking institution in writing.
(4) A bank or a deposit-taking institution may, within 15 working days of receipt of the notice from the Central Bank, appeal to the Appeals Tribunal.
15. Revocation and surrender of licence
(1) The Central Bank may revoke a licence of a bank or a deposit-taking institution where the bank or deposit-taking institution—
(a) without the written approval of the Central Bank, fails to commence the business authorised by the licence, within a period of 12 months from the grant of the licence;
(b) is found to have ceased to transact the business authorised by the licence;
(c) appears to the Central Bank to be carrying on business in a manner which is contrary to, or detrimental to the interests of its depositors or the public;
(d) is found to engage in money laundering, the financing of terrorism or the financing of the proliferation of arms of war or nuclear, biological and chemical weapons;
(e) operates in an unsafe and unsound manner;
(f) is wound up or is otherwise dissolved;
(g) is insolvent or fails to meet the minimum capital requirements as may be prescribed;
(h) has been convicted, or the principal officer, director, senior manager, significant shareholder or beneficial owner has been convicted, by any court of competent jurisdiction, in Botswana or elsewhere, of an offence related to the use or laundering, in any manner, of illegal proceeds, or that is an affiliate or subsidiary of a bank or deposit-taking institution which has so been convicted, and such conviction is final and can no longer be appealed;
(i) has supplied false or misleading information in the application for a licence; or
(j) has contravened any provisions of this Act.
(2) Where the Central Bank makes a decision to revoke a licence, the revocation shall take effect immediately.
(3) A bank or deposit-taking institution may, within 10 working days of receipt of the decision to revoke the licence, by the Central Bank, appeal to the High Court, with legal remedies restricted to monetary compensation.
(4) A bank or deposit-taking institution may, with the permission of the Central Bank, and in such manner and form as may be prescribed, surrender its licence at any time, and such surrender shall take effect after the notice of surrender has been published in accordance with subsection (6), and not less than 90 calendar days after the granting of the permission by the Central Bank.
(5) The Central Bank may, before and after the revocation or surrender of a licence, make such inquiry and give such directions as it considers fit, so as to ensure to the fullest extent possible that the interests of depositors and of the public are preserved.
(6) The Central Bank shall give notice to the public of any surrender or revocation of a licence by publishing notice in the Gazette, at least two newspapers of general circulation in Botswana and on the Central Bank's website.
16. Procedure in case of urgency
(1) The Central Bank may, in cases of urgency and in the public interest—
(a) revoke the licence of a bank or deposit-taking institution; or
(b) amend, add to or vary the conditions attaching to the licence, or impose special conditions thereon.
(2) Any revocation, amendment, addition to or variation of a licence as provided in subsection (1) shall, on notification to the bank or deposit-taking institution in question, have immediate effect and shall bind the bank or deposit-taking institution.
(3) A bank or deposit-taking institution may, within 10 working days of receipt of the decision of the Central Bank as specified under subsection (1)—
(a) appeal to the High Court, where the decision relates to revocation of a licence provided that the remedy shall be limited to monetary compensation; or
(b) appeal to the Appeals Tribunal where the decision relates to an amendment, addition to or variation of licence conditions.
(1) A bank or a deposit-taking institution shall not carry on banking business or deposit-taking activities in any office or branch or site including a mobile site other than its principal place of business, without the prior written approval of the Central Bank.
(2) A bank or deposit-taking institution shall not open or keep open a new place of business, close or keep closed an existing place of business, or change its location, without the prior written approval of the Central Bank.
(3) A bank or deposit-taking in situation shall not establish a subsidiary in Botswana without the prior written approval of the Central Bank.
(4) Any bank or a deposit-taking institution that contravenes the provisions of this section commits an offence and shall be liable to a fine not exceeding P2 000 000 as may be imposed by the Central Bank.
18. Prohibition of branches of foreign banks
A foreign bank shall not establish branches in Botswana.
A bank or a deposit-taking institution may engage in any activities, either directly or through a subsidiary subject to any limitation in the licence issued to such bank or deposit-taking institution, as may be prescribed.
20. Mergers, acquisitions and registration of controlling companies
(1) A bank or a deposit-taking institution that proposes to merge with or acquire another bank or a deposit-taking institution, shall notify the Central Bank in writing of the intention to do so not less than 30 days prior to submitting an application to merge with or acquire another bank or a deposit-taking institution.
(2) Where the Central Bank considers that the proposed merger or acquisition will not be contrary to the Act or public interest it shall, within 14 days of receipt of the notification, advise the bank or a deposit-taking institution to submit the application for assessment by the Central Bank.
(3) An application to merge or acquire shall be made to the Central Bank in such form as may be prescribed.
(4) The Central Bank shall, within 30 days after receipt of the application to merge with or acquire another bank, notify the Minister in writing, and the Central Bank shall cause the publication of the application to merge or acquire in the Gazette, and in at least two newspapers of general circulation in Botswana and on the Central Bank’s website.
(5) The Central Bank shall assess applications and determine major acquisitions or mergers concerning a bank or deposit-taking institution against criteria set by the Central Bank, including the establishment of cross-border operations, and confirming that corporate affiliations and structures do not expose the bank or a deposit-taking institution to undue risks or hinder effective supervision.
(6) A bank or a deposit-taking institution shall not, without prior written approval of the Central Bank—
(a) effect any voluntary merger, consolidation or other re-organisation of its business or affairs with another bank or deposit-taking institution;
(b) transfer to any other institution the whole or any of its assets or liabilities in Botswana;
(c) effect a reduction in its paid-up capital;
(d) alter its name; or
(e) amend the instrument under which it is established.
21. Transfer of significant or controlling interest
(1) A bank or a deposit-taking institution that proposes to hold or transfer significant or controlling interests, including a beneficial interest, or the exercise of voting rights over a significant interest or a controlling interest, shall make a written application to the Central Bank for approval.
(2) The Central Bank shall not approve an application made under subsection (1), unless the Central Bank is satisfied that—
(a) the proposed acquirer of the significant interest or a controlling interest is a fit and proper person as provided for under this Act;
(b) the bank or deposit-taking institution will be able to and continue to comply with the prudential requirements prescribed under this Act;
(c) where the acquisition or transfer of significant or controlling interest results in the bank or deposit-taking institution becoming a part of a group, that such structure makes it possible to exercise effective supervision; and
(d) there are no reasonable grounds to suspect that, in connection with the proposed acquisition, money laundering or terrorist financing is being or has been committed or attempted, or that the proposed acquisition could increase the risk thereof.
(3) The Central Bank shall have the power to reject any proposal for a change in significant ownership, including a beneficial interest or prevent the exercise of voting rights in respect of such investments.
(4) Where a bank or deposit-taking institution effects a change of control or significant shareholding without the approval of the Central Bank, the Central Bank shall take appropriate action to modify, reverse or otherwise redress the change of control or significant shareholding.
(5) A bank or a deposit-taking institution that contravenes subsection (1) commits an offence and shall be liable to a fine not exceeding P1 000 000 as may be imposed by the Central Bank.
PART III
Capital Structures (ss 22-26)
(1) The minimum capital required in respect of any tier of a bank shall be the greater of such amounts as may be prescribed, or such percentage of its assets, or group of assets and other risk exposures as may from time to time be determined by the Central Bank.
(2) The minimum unimpaired capital required in respect of any bank or deposit-taking institution shall be in such manner as may be prescribed.
(3) The Central Bank may, by directive or in a licence, determine a higher capital adequacy ratio with respect to a particular bank, class or category of banks specified by the Central Bank in accordance with the risks that the bank, class or category of banks is exposed to, or to all banks for any period that the Central Bank may specify.
(4) The Central Bank may exempt a bank from the provisions of subsection (3) for a period to be specified by the Central Bank upon good cause shown by the bank and on the basis of a schedule agreed between such bank and the Central Bank, specifying progressive compliance by the bank with the said capital requirements.
(5) A deposit-taking institution shall maintain minimum capital as may be prescribed:
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