ARRANGEMENT OF SECTIONS
SECTION
PART I
Preliminary
1. Short title
2. Interpretation
PART II
Establishment, Constitution and Objectives
3. Establishment of central bank
4. Objectives of Bank
4A. Operational independence of the Bank
4B. Functions of the Bank
4C. Power to issue directives, circulars, notices, etc.
PART III
Capital, Profits and Reserves
5. Capital
5A. Coverage of shortfall in capital
6. Profits, losses and distributable earnings
7. General Reserve
PART IV
Board, Management and Staff
8. Establishment and powers of Board
9. Membership of Board
10. [Repealed.]
11. Vacancy
12. Meeting and quorum of Board
13. Governor and Deputy Governors
13A. Powers and functions of Governor
14. Ineligibility
15. Disqualification and removal from office
16. Resignation
16A. Cooling-off period
17. Appointment of officers, employees, agents and correspondents
18. Conflict of interest
19. Secrecy
19A. Establishment, powers and functions of Monetary Policy Committee
19B. Membership of Monetary Policy Committee
PART V
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.
PART VI
International Reserve
30. Authority to transact foreign exchange business
31. Primary International Reserve
32. Adequacy of Primary International Reserve
33. Operations in foreign exchange
34. Limitations
35. Long term investment funds
PART VII
Relations with Financial Institutions
36. Opening accounts for domestic financial institutions, etc.
37. Opening accounts for other institutions, etc.
38. Operations with account holders
38A. Lender of last resort
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
43A. Deposit Insurance Scheme
43B. Licensing and oversight of clearing, payment and securities settlement systems, money or value transfer services
PART VIII
Regulation of Companies which have Applied for or been Issued with a Tax Certificate
44. Interpretation
45. Application
46. Exemptions
47. Supervisory and inspection powers
48. Power to inspect
49. Recommendations of Bank
50. Disclosure of information
51. Levying of fees
52. Offences
53. Penalty
PART IX
Relations with Government
54. Banker, fiscal agent of and adviser to Government
54A. Co-operation with Government and other authorities
54B. Establishment of Financial Stability Council
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. Prohibition on lending to Government
63. Agent for the administration of exchange control
64. Depository and fiscal agency for international financial organisations
65. Policy directives by the President
PART X
Accounts, Financial Statements and Financial Year
66. Accounts, records and financial year
67. External audit
67A. Audit Committee
68. Annual financial statements and reports
PART XI
General
69. Prohibited activities
70. Bank may call for information
71. Exemption from Banking Act
72. Exemption from taxes, etc.
72A. Indemnity
72B. Restriction on execution against property of Bank
72C. Preferential right
73. Regulations
74. Repeal and saving
Act 19, 1996,
Act 19, 1999,
Act 2, 2007,
Act 24, 2022,
S.I. 8, 2023,
S.I. 73, 2023.
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]
PART I
Preliminary (ss 1-2)
This Act may be cited as the Bank of Botswana Act.
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;
“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;
[24 of 2022, s. 2.]
“Deputy Governor” means a deputy governor appointed under section 13;
“financial institution” means—
(a) a bank as defined under the Banking Act (Cap. 46:04);
(b) a person licensed under this Act to carry out on business of buying and selling foreign exchange; or
(c) a non-bank financial institution as defined under the Non-Bank Financial Institutions Regulatory Authority Act (Cap. 46:08);
[24 of 2022, s. 2.]
“financial institution”, “bank” and “licensed” shall have the same meanings ascribed thereto under the Banking Act (Cap. 46:04);
“Governor” means the Governor of the Bank appointed under section 13;
“International Financial Reporting Standards” means the most recent and applicable international accounting standards issued by the International Accounting Standards Board;
[24 of 2022, s. 2.]
“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;
“Monetary Policy Committee” means the Committee established under section 19A;
[24 of 2022, s. 2.]
“officer” means an employee of the Bank who is authorised by the board to sign legal or other documents on behalf of the Bank;
“ordinary revenue” means all revenue from taxes, duties, fees, rents, profits and income from any investment or undertaking by the Government and any contribution to the revenue of the Government from any statutory corporation, but shall not include loans, grants, other forms of economic aid or capital raised and the average of the annual ordinary revenues for the three financial years immediately preceding for which audited accounts are available;
[24 of 2022, s. 2.]
“public issue” means any financial instrument issued or guaranteed by Government, which members of the public are eligible to hold.
PART II
Establishment, Constitution and Objectives (ss 3-4C)
3. Establishment of central bank
(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 primary objective of the Bank shall be to achieve and maintain domestic price stability.
[24 of 2022, s. 3.]
(2) Subject to subsection (1), the Bank shall contribute to the stability of the financial system and foster and maintain a stable, sound and competitive market-based financial system.
[24 of 2022, s. 3.]
(3) Without prejudice to subsections (1) and (2), the Bank shall support national economic development goals.
[24 of 2022, s. 3.]
(4) In the attainment of the objectives set out in this section, the Bank shall have and may exercise all the powers generally conferred upon a central bank.
[24 of 2022, s. 3.]
4A. Operational independence of the Bank
The Bank shall be operationally independent in pursuit of its primary objectives, and in the performance of its functions under this Act, shall act without fear, favour or prejudice or direction of any person, authority or institution.
[24 of 2022, s. 4.]
The functions of the Bank shall be to—
(a) formulate and implement monetary policy;
(b) formulate and implement policies to maintain financial stability;
(c) implement the exchange rate policy;
(d) conduct foreign exchange operations;
(e) hold and manage the official foreign exchange reserves of Botswana;
(f) issue and manage the currency of Botswana;
(g) establish, promote, regulate and oversee safe, sound, efficient payment, clearing and securities settlement systems, operators and providers under this Act or any legislation;
(h) regulate, license and supervise banks and such other financial institutions as may be specified in this Act or any legislation and impose remedial measures and administrative sanctions on banks and other financial institutions as may be specified in this Act or in the Banking Act;
(i) act as a banker to banks and other financial institutions as the Board may decide;
(j) provide services as banker, advisor and act as fiscal agent to the Government;
(k) collect data and produce statistics in accordance of its mandate under this Act;
(l) advise the Council on any potential risks to financial stability;
(m) propose recommendations, actions or programmes for adoption by the Council;
(n) periodically issue publications about its policies, functions and operations and the achievements of its objectives; and
(o) carry out any ancillary activities incidental to the exercise of its functions under this Act or any legislation.
[24 of 2022, s. 4.]
4C. Power to issue directives, circulars, notices, etc.
(1) The Bank shall have the power incidental or ancillary to give effect to its objectives and to carry out its functions to issue Bye-laws, directives, circulars, notices and guidelines.
[24 of 2022, s. 4.]
(2) A bank or a financial institution that falls under this Act shall comply with the requirement issued under subsection (1).
[24 of 2022, s. 4.]
(3) A person or a financial institution that fails to comply with a requirement issued by the Bank under subsection (1), commits an offence and is liable to a fine not exceeding P2 500 000 or to imprisonment for a term not exceeding 10 years.
[24 of 2022, s. 4.]
PART III
Capital, Profits and Reserves (ss 5-7)
(1) The authorised capital of the Bank, fully subscribed and paid-up, shall be P150 000 000.
[24 of 2022, s. 5.]
(2) The authorised capital stock of the Bank shall be held solely by the Government and shall not be transferrable in whole or in part or be subject to any encumbrance whatsoever.
[24 of 2022, s. 5.]
(3) The authorised capital of the Bank may be increased by such an amount as may be proposed by the Bank and approved by the Government and no reduction of the authorised capital shall be permitted at any time.
[24 of 2022, s. 5.]
5A. Coverage of shortfall in capital
(1) In the event the audited annual financial statements of the Bank show that the value of the Bank’s assets has fallen or is below the sum total of its liabilities and its unimpaired authorised capital and the general reserve, the Board, with advice of the external auditor of the Bank, shall assess the situation and examine the report on the causes and extent of the shortfall, within a period of not more than 30 days.
[24 of 2022, s. 6.]
(2) In the event the Board approves the report under subsection (1), the Bank shall request the Minister for a capital contribution by the Government to remedy the deficit.
[24 of 2022, s. 6.]
(3) Notwithstanding any other provision of this Act, the Minister shall cause to be transferred to the ownership of the Bank, non-negotiable, non-interest bearing securities at market rate, issued by the Government from time to time, for such an amount which in the opinion of the Board may be necessary for the purpose of preserving the Bank’s capital from any impairment.
[24 of 2022, s. 6.]
6. Profits, losses and distributable earnings
(1) The net profits or losses of the Bank shall be determined in accordance with the International Financial Reporting Standards and such other relevant international accounting standards applicable to central banks.
[24 of 2022, s. 7.]
(2) The Bank shall at the end of each financial year, 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.
[24 of 2022, s. 7.]
(3) 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.
[24 of 2022, s. 7.]
(4) 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.
[24 of 2022, s. 7.]
(5) The distributable earnings for allocation under subsection (2) shall be determined as follows—
(a) by deducting from net profits the total amount of unrealised revaluation gains and by allocating an equivalent amount to the respective unrealised revaluation reserve accounts; and
(b) by deducting from the unrealised revaluation reserve accounts and adding to the distributable earnings as determined under paragraph (a) the amount of any unrealised profit that was deducted from the net profits for one or more previous years and was realized during the current financial year.
[24 of 2022, s. 7.]
(6) Unrealised revaluation losses shall be transferred by the Bank to the respective unrealised revaluation reserve accounts until such time as the revaluation reserve accounts have zero balance, then be charged against the current year’s realised income until such time the income is zero, after which the losses shall be covered by the current year’s profit, then by the general reserve.
[24 of 2022, s. 7.]
(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.
PART IV
Board, Management and Staff (ss 8-19B)
8. Establishment and powers of Board
(1) There shall be a Board of the Bank, constituted in accordance with section 9, in which, subject to the provisions of this Act, shall be responsible for the policy and general administration of the Bank.
[24 of 2022, s. 8.]
(2) The Board shall—
(a) formulate and adopt policies of the Bank, other than monetary policy;
(b) supervise implementation of policies and execution of functions of the Bank;
(c) appoint external auditors;
(d) appoint the executive management of the Bank;
(e) on the recommendation of the Monetary Policy Committee, approve the issuance of debt certificates by the Bank;
(f) appoint such committees, as the Board may consider necessary for the discharge of the functions of the Bank;
(g) determine general policies and adopt Bye-laws and internal rules applicable to the administration and operations of the Bank;
(h) determine the organisation of the Bank, including the establishment and location of branches, representative offices, and operations facilities;
(i) approve the appointment of officers to the post of Deputy Head of Department, including that of the head of the internal audit function in the Bank;
(j) determine and approve the Staff Establishment necessary to fulfil the functions of the Bank and the general terms and conditions of service for staff, including allowances and other benefits;
(k) approve the budget of the Bank;
(l) determine the accounting policies of the Bank and approve the annual report, other formal reports and financial statements of the Bank;
(m) determine the categories of assets that shall be suitable for investment of the Bank’s financial resources, as well as those assets in which to invest the official foreign reserves;
(n) approve or deny the issuance of licences for clearing, payment and securities settlement systems operators and providers subject to this Act or any other Act;
(o) approve or deny the issuance by the Bank of licences for banks and other financial institutions, subject to this Act or any other Act;
(p) propose, for the approval by the Minister, the form, design, composition and denomination of banknotes and coin;
(q) assess risks and formulate contingency plans for the ongoing operations and security of the Bank;
(r) adopt the rules of procedure of the Board; and
(s) exercise such other powers and functions as explicitly granted by this Act.
[24 of 2022, s. 8.]
(1) The Board shall consist of—
(a) seven members appointed by the Minister from among persons of good standing and experience in business, professional or academic matter, with not more than two members being public officers;
(b) the Governor; and
(c) the Permanent Secretary of the Ministry responsible for finance.
[24 of 2022, s. 9.]
(2) The Minister shall appoint the chairman of the Board from amongst persons appointed under subsection (1)(a).
[24 of 2022, s. 9.]
(3) The Deputy Governors shall be entitled to attend all meetings of the Board but shall have no vote unless they have been appointed members under this section.
[24 of 2022, s. 9.]
(4) The members appointed under subsection (1)(a), other than Deputy Governors, shall be appointed for a term not exceeding four years and shall be eligible for re-appointment.
[24 of 2022, s. 9.]
(5) The members appointed under this section shall be entitled to such fees and allowances as may be determined by the Board with the approval of the Minister.
[24 of 2022, s. 9.]
(6) The Minister shall, within three months after commencement of this Act appoint a chairman of the Board.
[24 of 2022, s. 9.]
[24 of 2022, s. 10.]
If any member dies, resigns, ceases to hold, or is otherwise removed from office before the expiry of the term for which he has been appointed, another person shall be appointed at the earliest opportunity under section 9 for the remaining period of such first-mentioned member’s term.
[24 of 2022, s. 11.]
12. Meeting and quorum of Board
(1) Subject to the provisions of this Act, the Board may regulate its own proceedings.
[24 of 2022, s. 12.]
(2) The Board shall hold its first meeting on such date and at such place as the Minister may determine and thereafter the Board shall meet at least four times in a year.
[24 of 2022, s. 12.]
(3) Upon giving notice, in writing, of not less than 14 days, a meeting of the Board may be called by the Chairperson, but if the urgency of any particular matter does not permit the giving of such notice, a special meeting may be called upon the giving of a shorter notice period.
[24 of 2022, s. 12.]
(4) There shall preside at any meeting of the Board—
(a) the chairman; or
(b) in the absence of the chairman, the person elected by members present from amongst persons appointed under section 9(1)(c) to act as chairman for purposes of that meeting.
[24 of 2022, s. 12, S.I. 73/2023.]
(5) The quorum at any meeting of the Board shall be a simple majority of the members present and voting at the meeting.
[24 of 2022, s. 12.]
(6) A decision of the Board on any question shall be taken on a consensus basis except that where a member requests a vote the matter shall be decided by a simple majority of the members present and voting at the meeting, and in the event of an equality of votes, the chairman shall have a casting vote in addition to his deliberate vote.
[24 of 2022, s. 12.]
(7) A decision of the Board shall not be rendered invalid by reason of a vacancy on the Board or the fact that a person who was not entitled to sit as a member did so sit.
[24 of 2022, s. 12.]
(8) The Board may invite any person whose presence it deems necessary, to attend and participate in the deliberations of a meeting of the Board, but such person shall not participate in any decision making.
[24 of 2022, s. 12.]
13. Governor and Deputy Governors
(1) The President shall, in consultation with the Minister, appoint a Governor of the Bank and such number of Deputy Governors as he may consider necessary, who shall be persons of recognised experience in economics and financial matters.
[24 of 2022, s. 13(a).]
(2) The Governor, who shall be a person of recognised experience in economics and financial matters, shall be appointed for a term not exceeding five years, and shall be eligible for re-appointment for a further term not exceeding five years.
[24 of 2022, s. 13(b).]
(3) Subject to the provisions of this Act, the Governor shall be appointed on such terms and conditions as may be set out in his letter of appointment, which terms and conditions shall not be altered to his disadvantage during his term of appointment.
[24 of 2022, s. 13(c).]
(4) The Governor shall serve as the chief executive officer of the Bank responsible to the Board for the execution of its policies and, on behalf of the Board, shall have the direction and control of the business of the Bank with authority to act in connection with the conduct of the business of the Bank in all matters that are not, by this Act or by the Bye-Laws of the Bank, specifically reserved to be done by the Board, and, with the approval of the Board, may delegate these powers to other officers of the Bank.
(5) The Deputy Governors shall exercise such powers and carry out such duties as may be delegated or assigned to them by the Governor.
(6) In the event of the Governor having to be absent from his office for a period exceeding 14 days, he shall recommend, to the Minister, which of the Deputy Governors shall act in his absence; and where the Governor is away from his office for less than 14 days, he shall appoint one of the Deputy Governors to act as Governor in his absence and shall promptly notify the Minister thereof.
(7) While holding office, the Governor and the Deputy Governors shall devote the whole of their professional services to the bank and shall not, without the written approval of the Minister, receive any salary or supplement thereto from any source other than the Bank or occupy any other office or employment, whether remunerated or not, except as a nominee of the Bank:
Provided that the Governor or Deputy Governors may serve on any board, committee or commission established by Government, or become Governor, director or member of the board of any other body or any international financial organisation of which Botswana is a member.
13A. Powers and functions of Governor
(1) The Governor shall be responsible for—
(a) implementation of the policies of the Bank in accordance with the regulations, internal rules and decisions of the Board or the Monetary Policy Committee;
(b) the execution of the Board’s decisions and for the direction and control of the administration and operations of the Bank;
(c) taking all actions required or deemed advisable for the administration or operations of the Bank, including without limitation to the procurement of goods and services, entering into contractual commitments on behalf of the Bank;
(d) appointing the staff, agents and correspondents of the Bank;
(e) generally representing the Bank;
(f) taking enforcement measures, including instructing any supervised bank and financial institution or any clearing, payment and security settlement system that it oversees;
(g) imposing remedial measures;
(h) appointing a receiver or temporary management for such entities; and
(i) imposing administrative sanctions provided under this Act.
[24 of 2022, s. 14.]
(2) The Governor may within the rules adopted by the Board, delegate any of his powers or functions to senior officers of the Bank.
[24 of 2022, s. 14.]
(3) The Governor shall report, not less than four times each year, to the Board on the conduct of the Bank’s operations.
[24 of 2022, s. 14.]
(1) No person, while—
(a) a member of the National Assembly; or
(b) a director, officer, employee or owner of, or shareholder in, any financial institution, except as an appointee of Government,
shall assume the office of Governor, Deputy Governor or other member.
(2) No minor or other person under a legal disability shall be appointed as Governor, Deputy Governor or other member.
15. Disqualification and removal from office
(1) The appointment of a Governor, Deputy Governor or other member who—
(a) becomes subject to any of the disqualifications set out in section 14;
(b) whether in Botswana or elsewhere, becomes insolvent or has been declared bankrupt and has not been rehabilitated;
(c) whether in Botswana or elsewhere, has been convicted of an offence for which he could have been sentenced to imprisonment without the option of a fine; or
(d) has, in the case of a person possessed of professional qualifications, been disqualified or suspended (other than at his own request) from practising his profession by the order of any competent authority made in respect of him personally by reason of his misconduct,
shall terminate forthwith.
(2) A person holding the office of Governor, Deputy Governor or member may be removed from office only for inability to perform the functions of his office (whether arising from infirmity of body or mind or any other cause) or for gross misconduct and shall not be so removed except in accordance with this section.
(3) If the President considers that the question of removing the Governor, a Deputy Governor or member from office ought to be investigated, he shall appoint a tribunal, which shall consist of a chairman, who holds or has held high judicial office, and not less than two other persons, one of whom shall have expertise in banking or financial matters, which shall enquire into the matter and report on the facts thereof to the President and advise the President on whether such Governor, Deputy Governor or member ought to be removed from office under this section.
(4) Where a tribunal appointed under subsection (3) advises the President that such person ought to be removed from office, the President shall remove such person from office.
(5) If the question of removing a person from office has been referred to a tribunal under this section, the President may suspend that person from performing the functions of his office, and any such suspension may at any time be revoked by the President and shall in any case cease to have effect if the tribunal advises the President that such person ought not to be removed from office.
The Governor or Deputy Governors may resign their office on giving not less than three months’ notice in writing to the President and the other members may resign their respective offices on giving not less than one month’s notice in writing to the Minister.
(1) The Governor and Deputy Governor shall not engage in any occupational activity, with a financial, payment or credit services provider, whether gainful or not, for a period of 12 months from the date of cessation of their service to the Bank.
[24 of 2022, s. 15.]
(2) The Governor or Deputy Governor who is affected by subsection (1), shall receive remuneration equal to 75 per cent of the incumbent basic salary for the duration of the cooling-off period.
[24 of 2022, s. 15.]
17. Appointment of officers, employees, agents and correspondents
(1) All appointments of officers and employees of the Bank shall be only to positions created by or pursuant to decisions of the Board and at such remuneration and on such other terms and conditions as shall be prescribed by the Board.
(2) All appointments of agents and correspondents of the Bank shall be made pursuant to the policies of the Board.
(3) No salary, fee, wage or other remuneration, or allowances paid by the Bank shall be computed by reference to the net or other profits of the Bank.
(1) A member, staff or agent of the Bank shall avoid any situation liable to give rise to a conflict of interest and a conflict of interest shall arise where the member, staff or agent has a private or personal interest which may influence or appear to influence the impartial and objective performance of his duties.
[24 of 2022, s. 16.]
(2) A member, staff or agent of the Bank shall not receive or accept from any source, any benefits, rewards, remuneration or gifts whether financial or non-financial which are connected in any way whatsoever with his activities within the Bank, in excess of a customary or negligible amount as specified under this Act.
[24 of 2022, s. 16.]
(3) A member, staff or agent of the Bank shall not use confidential information to which he has access for the purpose of carrying out private financial transactions whether directly or indirectly through a third party or whether conducted at his own risk and for his own account or at the risk and for the account of a third party.
[24 of 2022, s. 16.]
(4) A member, staff or agent of the Bank shall before the last day of January each year, disclose to the Board in full significant financial interests which he or any person with whom he has family business or financial connections may directly or indirectly possess and such disclosures shall also be made on a continuous basis in case of any material change in status and the Board may also require financial disclosure obligations for the staff or agents involved in financial operations or having access to such confidential information.
[24 of 2022, s. 16.]
(5) A member, staff or agent of the Bank shall whenever any matter related to conflict of interest is before the Board, such person shall fully and promptly disclose his interest at the beginning of the discussion and shall not participate in the discussion and decision of the matter, but his presence shall be counted for the purpose of constituting a quorum.
[24 of 2022, s. 16.]
(6) A member, staff or agent of the Bank shall have a fiduciary duty to the Bank and to place the Bank’s interests and the customer’s interests before his own pecuniary interest.
[24 of 2022, s. 16.]
(7) Any person who contravenes any provision of this section commits an offence and shall be liable to a fine not exceeding P500 000 or to imprisonment for a term not exceeding five years or both.
[24 of 2022, s. 16.]
(1) A member, employee or agent of the Bank shall not disclose to any person information relating to the affairs of the Bank or any financial institution, business or other person, which information he has acquired in the performance of his duties or functions, except when he is lawfully required to do so by a court or under any law or when the interest of the Bank requires disclosure in legal proceedings or when the Bank provides information to an agency in Botswana.
[24 of 2022, s. 17(a).]
(2) Every person appointed under or employed in carrying out the provisions of this Act, except the Minister, shall make an oath or declaration of secrecy in the manner and form prescribed.
(3) Every such person who, in contravention of the true intent of the oath or declaration of secrecy made by him and without lawful excuse, reveals any matter or thing which has come to his knowledge in the performance of his duties or the exercise of his functions shall be guilty of an offence and shall be liable to a fine not exceeding P200 000 or to imprisonment for a term not exceeding five years, or to both.
[24 of 2022, s. 17(c).]
(4) Any person who, being required by this section to make the prescribed oath, acts in the execution of his office before he has made such oath, shall be guilty of an offence and shall be liable to a fine not exceeding P200 000.
[24 of 2022, s. 17(c).]
(5) The Bank may, at its initiative or upon request made to it by any central bank, supervisory authority or any regulatory authority in the ordinary course of business, disclose any of the information to such institution within or outside Botswana, except that the Bank shall satisfy itself that the information is required for the proper discharge of the duties of the requesting authority and such authority shall be bound by professional secrecy or confidential duty.
[24 of 2022, s. 17(b).]
(6) In the case the information originates from a foreign authority, the exchange of information with such authorities shall be allowed when such foreign authority has agreed to the further transmission of its information.
[24 of 2022, s. 17(b).]
19A. Establishment, powers and functions of Monetary Policy Committee
(1) There shall be a Monetary Policy Committee which shall be responsible for the formulation of the monetary policy within the Bank.
[24 of 2022, s. 18.]
(2) The Monetary Policy Committee shall within the context of the monetary policy framework approved by the Minister and the general procedures and guidelines determined by the Board, formulate the Bank’s monetary policy.
[24 of 2022, s. 18.]
(3) The Monetary Policy Committee shall, within the context of the exchange rate regime, established by the President in consultation with the Minister and the Governor, implement the exchange rate policy.
[24 of 2022, s. 18.]
(4) The Monetary Policy Committee shall issue debt certificates and such instruments as may be necessary for monetary policy operations.
[24 of 2022, s. 18.]
19B. Membership of Monetary Policy Committee
(1) The Monetary Policy Committee shall comprise of—
(a) the Governor who shall be chairman;
(b) the Deputy Governors;
(c) the head of the department responsible for economic research of the Bank;
(d) the head of the department responsible for treasury operations of the Bank; and
(e) four persons appointed by the Minister, who are not employees of the Bank, with knowledge and experience relevant to the functions of the Monetary Policy Committee.
[24 of 2022, s. 18.]
(2) The Monetary Policy Committee shall adopt decisions by a simple majority of the membership present and voting at the meeting and, in the event of an equality of votes, the Governor shall have a casting vote in addition to his deliberate vote.
[24 of 2022, s. 18.]
PART V
Monetary Unit, Notes and Coins (ss 20-29)
(1) With effect from 23rd August, 1976 the monetary unit of Botswana shall be the Pula, divided into one hundred Thebe, the symbols for which shall be “P” and “t” respectively.
(2) With effect from the date referred to in subsection (1), any reference to an amount of money expressed in terms of a currency in force in Botswana on the said date in any—
(a) written law of Botswana, including any instrument having effect by virtue of an Act; or
(b) contract, agreement, sale, payment, bill, note, instrument, and security for money, and any transaction, dealing, matter and thing whatever relating to money, or involving the payment of or the liability to pay any money, existing as of the aforesaid date and which is to be executed or discharged in Botswana,
shall be deemed to be a reference to the corresponding amount of money expressed in terms of the Pula calculated at the official rate declared by the Bank.
The framework for determining the external value of the Pula shall be determined by the President on the recommendation of the Minister after consultation with the Governor.
[24 of 2022, s. 19.]
22. Sole right to issue notes and coins
(1) The Bank shall have the sole right to procure the printing of notes and the minting of coins denominated in Pula and Thebe and to issue them into circulation.
(2) No person other than the Bank or an entity duly authorised by the Bank shall issue in Botswana notes or coins, or any documents or tokens payable to bearer on demand, having the appearance of, or purporting to be, or which are likely to pass as or be confused with legal tender.
(3) Any person who contravenes subsection (2) shall be guilty of an offence and shall be liable to a fine not exceeding P10 000 000 or to imprisonment for a term not exceeding 20 years, or to both.
[24 of 2022, s. 20.]
23. Notes and coins to be legal tender
Notes and coins issued by the Bank shall be legal tender within Botswana and shall be valid—
(a) in the case of notes, for the payment of any amount;
(b) in the case of coins, for the payment of an amount not exceeding P1 000.
[24 of 2022, s. 21.]
24. Manufacture and characteristics of notes and coins
(1) The Bank shall arrange for the printing of notes and the minting of coins and for all matters relating thereto, and for the security and safekeeping of unissued notes and coins, and for the custody and destruction, as necessary, of plates, dies and retired or soiled or torn notes or soiled or damaged coins.
(2) Notes and coins issued by the Bank shall be of such denominations, composition, form and design as shall be approved by the Minister.
(3) The characteristics of notes and coins to be issued by the Bank shall be published in the Gazette.
The Bank may, on giving such notice as it deems appropriate or desirable in the circumstances, which shall be published in the Gazette and in such other manner calculated to inform the public as the Minister may determine, call in, for the purpose of withdrawing from circulation, any notes or coins which it has issued, on payment of the face value thereof in accordance with section 26, and any such notes or coins shall, on the expiry of such notice and notwithstanding section 23, cease to be legal tender:
Provided that a holder of such notes and coins shall be entitled within such period, being not less than five years, as may be specified in such notice or in any subsequent notice, to claim payment from the Bank of the face value thereof.
26. Exchange of notes and coins
(1) Upon surrender by any person to the Bank or to any agent authorised by the Bank for the purpose of any notes or coins which it has issued, the Bank shall, subject to subsections (2) and (3), exchange on demand and without charge such notes or coins for notes and coins of equivalent value and of such denominations as may be requested:
Provided that in the event of the unavailability of a requested denomination, the Bank may deliver notes and coins of available denominations which most nearly approximate those requested.
(2) Coins which have been perforated, cut, clipped, broken, or on which any mark has been privately impressed, or which show signs of non-monetary use, or the design of which is not distinguishable, shall not be exchanged by the Bank, except in its sole discretion.
(3) The conditions under which mutilated or otherwise damaged notes may be exchanged at partial or full face value shall be determined from time to time by the Bank.
27. Penalty for mutilation of notes
Any person who, without the permission of the Bank, wilfully—
(a) cuts, tears, perforates, or in any other way whatsoever mutilates any note issued by the Bank;
(b) writes, prints, stamps or draws anything upon any such note; or
(c) attaches or affixes any seal or stamp to or upon any such note,
shall be guilty of an offence and shall be liable to a fine not exceeding P2 500 or to imprisonment for a term not exceeding six months, or to both.
28. Recovery of lost or stolen notes and coins
No person shall be entitled to recover from the Bank the value of any lost or stolen notes or coins, except as may be provided under the terms of a waiver expressly executed in respect of the assumption by the Bank of risks incident to shipment of notes and coins:
Provided that nothing in this section shall affect the liability of the Bank for any loss suffered by any person in consequence of the negligence or misconduct, in the course of his official duties, of the Governor, Deputy Governor or member, or any officer, employee or agent of the bank.
29. Counterfeiting, forgery, etc.
(1) Any person who counterfeits, forges or, without the permission of the Bank, photocopies or otherwise reproduces any note issued by the Bank shall be guilty of an offence and shall be liable to a fine not exceeding P10 000 000 or to imprisonment for a term not exceeding 20 years, or to both.
[24 of 2022, s. 22.]
(2) A certificate signed by a duly authorised officer of the Bank that any note or coin is or is not genuine shall be prima facie evidence of such fact in any legal proceedings in Botswana.
PART VI
International Reserve (ss 30-35)
30. Authority to transact foreign exchange business
(1) Subject to subsection (3), no person shall carry on the business of buying and selling foreign exchange (hereinafter referred to as “to transact foreign exchange business”) without a licence issued by the Bank in the prescribed form and on such terms and condition as it may determine.
[19 of 1999, s. 2.]
(2) An application to transact foreign exchange business shall be in the prescribed form and shall be accompanied by such documentation, additional information and fees as may be prescribed.
[19 of 1999, s. 2.]
(3) The requirement for a licence to transact foreign exchange business under subsection (1) shall not apply to a—
(a) bank licensed under the Banking Act (Cap. 46:04);
(b) hotel licensed under the Tourism Act (Cap. 42:09); or
(c) person being paid in foreign currency for goods or services rendered.
[19 of 1999, s. 2.]
(4) Any person who contravenes the provisions of this section shall be guilty of an offence and shall be liable to a fine not exceeding P1 000 000 or to imprisonment for a term not exceeding seven years or to both.
[19 of 1999, s. 2.]
31. Primary International Reserve
(1) The Bank shall establish and maintain, on such terms and conditions as the Board may from time to time determine, a Primary International Reserve which shall consist of all or any of the following—
(a) demand or time deposits, money at call, banknotes and coins, bills of exchange and repurchase agreements or reverse repurchase agreements denominated in such foreign currencies as the Board may, for purposes of this section, approve;
[24 of 2022, s. 23(a).]
(b) treasury bills, bonds, and other securities denominated in such foreign currencies issued or guaranteed or de facto guaranteed by such foreign governments or corporations, or international financial institutions as the Board may, for the purposes of this section, approve;
(c) such fully collateralised loans of the assets listed in paragraphs (a) and (b) as the Board may for purposes of this section approve;
(d) such collective investment funds, including pooled or group trust funds or mutual funds, which invest in any or all of the assets referred to in paragraphs (a), (b) and (c), as the Board may, for the purposes of this section, approve;
(e) any internationally recognised reserve asset, including—
(i) the reserve tranche position of Botswana in the International Monetary Fund;
(ii) Botswana’s holdings of Special Drawing Rights;
(f) such other assets as the Board may, for the purposes of this section, approve.
[24 of 2022, s. 23(b).]
(2) Any changes in the value of the Primary International Reserve in any financial year in terms of Pula arising from currency exchange gains or losses shall be charged to the General Reserve established under section 7.
32. Adequacy of Primary International Reserve
(1) The Bank shall use its best endeavours to maintain the Primary International Reserve established under section 31 at a level which determined by the Board to be sufficient to enable the Bank to achieve its principal objectives.
(2) If such Primary International Reserve has declined or, in the opinion of the Governor, appears to be in danger of declining below the level specified in section 32, the Governor shall submit to the Minister a report on the reserve position and the causes which have led or may lead to such a decline together with recommendations concerning the measures that the Bank considers necessary to forestall or otherwise remedy the situation.
(3) Until such time as, in his opinion, the situation has been rectified, the Governor shall make further reports and recommendations at intervals not exceeding three months.
33. Operations in foreign exchange
The Bank may, subject to such terms and conditions as may from time to time be determined by the Board, buy, sell or deal in any of the reserve assets listed in section 31 using for these purposes any of the instruments commonly used in such transactions.
In connection with the operations referred to in section 33, the Bank shall deal only with governments, government institutions, international institutions, financial organisations of good standing and such persons as have been approved by the Board.
35. Long term investment funds
(1) If in the Bank’s opinion, the primary international reserve is in excess of the amount needed to accomplish its principal objectives and to finance the international transactions of Botswana and is likely to remain in that position for some time, the Bank may, after consultation with the Minister, establish a separate long-term investment fund or funds in which to invest the assets in excess of those needed for the Primary International Reserve.
(2) The Minister may decide to invest part of the Government’s balances at the Bank in such long term investment funds, and the Bank shall set up separate investment accounts for such Government balances.
(3) The Bank, after consultation with the Minister, shall determine the policies, terms and conditions for any such long term investment funds including the selection of appropriate investments and the payment of dividends, which dividends shall be charged to the income of the Bank and to the Government investment accounts, as the case may be.
(4) In any financial year, any changes in the Pula or market value of such long term investment funds that are attributable to the Government investment accounts shall be charged to such investment accounts.
(5) Any changes in the Pula or market value of such long term investment funds that are attributable to the Bank shall be charged to separate reserve accounts established by the Bank to record such changes.
(6) If such special reserve accounts are insufficient to cover reductions in the Pula or market value of the Bank’s share of such long term investment funds, such insufficiency shall be charged to the General Reserve.
(7) The accounts and auditing for any such long-term investment funds shall be governed by sections 66, 67 and 68.
PART VII
Relations with Financial Institutions (ss 36-43B)
36. Opening accounts for domestic financial institutions, etc.
The Bank may open accounts for, and accept deposits from domestic financial institutions, deposit insurance agencies and other entities, including central securities depository institutions, under such terms and conditions as the Board may from time to time determine.
[24 of 2022, s. 24.]
37. Opening accounts for other institutions, etc.
The Bank may also open accounts for, and accept deposits from—
(i) foreign financial institutions, foreign governments, international and regional organisations; and
(ii) other persons authorised to tender for auctions of Bank of Botswana, Government or other public securities.
38. Operations with account holders
(1) For the purposes of this section, “account holders” means financial institutions and other persons maintaining accounts with the Bank under section 36.
(2) The Bank may, on such terms and conditions as the Board may from time to time determine—
(a) purchase from, sell to, discount and rediscount for account holders, bills of exchange and promissory notes drawn or made for commercial, industrial or agricultural purposes, bearing two or more good signatures of which at least one shall be that of a bank, and maturing within 184 days from the date of their acquisition by the Bank;
(b) purchase from, sell to discount and rediscount for account holders any treasury bills or other securities issued or guaranteed by Government, forming part of a public issue;
[24 of 2022, s. 25.]
(c) sell to, purchase from, discount and rediscount for account holders any securities issued by the Bank of Botswana.
(3) The Bank may, on such terms and conditions as the Board may from time to time determine, grant to account holders loans and advances for periods not exceeding 92 days—
(a) secured by—
(i) instruments specified in paragraph (a), (b) or (c) of subsection (2);
(ii) other securities issued or guaranteed by Government and forming part of a public issue;
(iii) warehouse receipts and documents of title issued in respect of staple commodities or other goods duly insured; or
(iv) holdings of any assets which the Bank is permitted to buy, sell or deal in under section 31; or
(b) unsecured or secured by such other assets, on such special terms and conditions as the Board shall determine when, in its opinion, such a loan or advance is exceptionally necessary to meet the liquidity requirements of the borrower.
(1) The Bank may, in exceptional circumstances and on such terms and conditions as it may determine, act as a lender of last resort for a bank by providing emergency liquidity assistance to the bank or for the bank’s benefit, for a period not exceeding 92 calendar days, that may be renewed by the Bank on the basis of a programme specifying the measures that the bank concerned will be taking:
Provided that no such commitment shall be made by the Bank, unless—
(i) in the opinion of the Bank, the bank is solvent and provides adequate collateral and the request for financial assistance is based on the need to improve liquidity, or
(ii) the assistance is necessary to preserve the stability of the financial system and the Minister has issued to the Bank a guarantee in writing on behalf of the Government securing the repayment of the loan.
[24 of 2022, s. 26.]
(2) The Bank shall determine the maximum percentage of the value of the surety deposited to guarantee the credit operations provided under subsection (1).
[24 of 2022, s. 26.]
(3) The Bank shall take appropriate measures required under the Act, where it discovers that a bank is unable to carry out the approved programme provided under subsection (1).
[24 of 2022, s. 26.]
(4) The total period of the loans and facilities granted under this section shall not exceed 184 calendar days.
[24 of 2022, s. 26.]
39. Determination of rates for discounts and advances
The Bank shall determine and publicly announce from time to time its rates for discounts, rediscounts, loans and advances made under section 38, and may determine differential rates and ceilings for various classes of transactions or maturities.
40. Primary reserve requirements
(1) The Bank may, from time to time, require, by written notice to the principal place of business in Botswana of each financial institution, as confirmed by a subsequent order published in the Gazette, the maintenance by financial institutions of primary reserves, including marginal primary reserves, against such deposit and similar liabilities as may be specified by the Bank for this purpose:
Provided that the Bank may in the exercise of its functions under this subsection require different primary reserves for different types of financial institutions as determined by the Bank.
(2) Such primary reserves shall be maintained by way of cash holdings, or by way of deposits with the Bank or by both in such proportion as the Bank may from time to time determine.
(3) …
[24 of 2022, s. 27.]
(4) The Bank may fix different reserve ratios for different classes of deposit and similar liabilities and may determine the method of their computation:
Provided that—
(i) the Bank shall not, without the prior approval of the Minister, require a financial institution to hold a total amount of primary reserves in excess of 25 per cent of its total deposit and other similar liabilities;
(ii) the initial fixing of, or any increase in, the required primary reserve ratios shall be effective only after reasonable notice, not less than 30 days, or such shorter period as the Minister may approve, has been given, and shall not relate to a period prior to the initial date of the notice;
(iii) the Bank may determine that the requirements of this subsection may be met by meeting the required primary reserve ratio on the basis of averages of daily reserve holdings over such averaging period as the Bank may determine;
(iv) the required primary reserve ratios, the method of their computation, and any averaging period determined under paragraph (iii) shall be uniform for all financial institutions within the same class.
(5) The Bank may impose on and collect from any financial institution which fails to maintain required primary reserves in the appropriate ratio fixed under this section a levy not exceeding one-fifth of one percent per day on the amount of deficiency in such institution’s primary reserves until the deficiency is corrected.
41. Regulation of interest and credit
(1) The Bank may, with the approval of the Minister, specify, in respect of any or all financial institutions, by notice published in the Gazette and by written notice to the principal place of business in Botswana of each financial institution affected thereby—
(a) the methods of computation and maximum and minimum rates of interest payable in respect of any class of deposit and similar liabilities;
(b) the permissible purposes, aggregate ceilings, maximum amounts beyond which the approval of the Bank is necessary, minimum cash margin or security, maximum maturities, and maximum interest rates chargeable in respect of—
(i) the making of any class of advances, whether by loans or overdrafts, and investments;
(ii) the discounting of any class of bills of exchange, promissory notes and other commercial, industrial, agricultural or financial paper;
(iii) the issuing of any class of letters of credit;
(iv) the granting of any class of acceptance and other forms of credit;
(c) the minimum and maximum commissions, service charges and other fees which may be levied on any class of transactions with the public;
(d) the manner of disclosure to the public and to—
(i) each depositor of the effective annual interest rate payable in respect of deposits made therewith;
(ii) each person to whom credit is extended of the terms of obtaining such credit, including the effective annual interest rate payable in respect thereof:
Provided that the Bank in notices under this subsection may differentiate in respect of the aforesaid items between—
(i) financial institutions or classes thereof; and
(ii) other creditors referred to in subsection (2), or classes thereof, or members of such classes.
(2) With the approval of the Minister, all or any of the provisions of subsection (1) may be made applicable by the Bank, by notice published in the Gazette and by written notice served on the person affected thereby, to any person a substantial share of whose operations, in the opinion of the Bank, includes the extension of credit.
(3) The Bank may call for and examine the accounts, books and papers of any person who, it has reason to believe, is extending or has extended credit and to whom the Bank considers the provisions of subsection (1) should be applied under subsection (2).
(4) Any notice issued under this section shall come into effect on such date as is specified therein but in any case not earlier than 30 days after the date of publication in the Gazette.
(5) Any financial institution which fails to comply with the provisions of a notice issued under subsection (1) shall be guilty of an offence and shall be liable to a fine not exceeding P50 000.
(6) Any person to whom the provisions of subsection (1) have been made applicable, pursuant to subsection (2), and who—
(a) fails to comply with a notice issued under subsection (1);
(b) knowingly supplies false information to the Bank; or
(c) fails to furnish, within the time prescribed by the Bank, any documents called for by the Bank under subsection (3), shall be guilty of an offence and shall be liable—
(i) in respect of an offence under paragraph (a) or (b), to a fine not exceeding P100 000;
[24 of 2022, s. 28(a).]
(ii) in respect of an offence under paragraph (c), to a fine not exceeding P10 000 for every day during which such offence has continued.
[24 of 2022, s. 28(b).]
42. Maximum amounts of foreign currency holdings or loans
The Bank may from time to time determine the maximum amount which any financial institution may hold or maximum indebtedness which it may incur in foreign currencies generally or in any specified currency or currencies.
The Bank may, in conjunction with financial institutions, organise facilities for the clearing of cheques and other instruments for effecting payments.
(1) There shall be established and maintained in such manner as may be prescribed a Deposit Insurance Scheme to provide insurance against the loss of part or all deposits in a bank in a manner that will contribute to the stability of the financial system in Botswana and minimise the exposure of loss.
[24 of 2022, s. 29.]
(2) Without prejudice to the generality of the foregoing, regulations made under subsection (1) shall set out the terms and conditions of the scheme which shall include—
(a) financing of the Deposit Insurance Scheme through a deposit insurance fund to which shall be credited premiums levied on banks and shall be charged all costs associated with the payment of deposits any restructuring of banks to reduce or avert a threatened loss to the scheme or to pay costs of their liquidations;
(b) types of deposits covered and the ceiling of coverage;
(c) powers of the body administering the scheme; and
(d) administration of the scheme.
[24 of 2022, s. 29.]
(3) The Bank may advance funds to the deposit insurance fund on such repayment terms and conditions as it deems fit for the administration of the Deposit Insurance Scheme.
[24 of 2022, s. 29.]
43B. Licensing and oversight of clearing, payment and securities settlement systems, money or value transfer services
(1) The Bank shall be responsible for the licensing, registration and oversight, including the imposition of remedial measures and administrative sanctions, of clearing, payment, money or value transfer services and securities settlement systems, as well as any operator or provider directly or indirectly involved in such systems, in order to ensure the integrity, efficiency and safety of the payment system.
[24 of 2022, s. 29.]
(2) The Minister may, by Regulations—
(a) require the registration or licensing of any clearing, payment, money or value transfer services and securities settlement systems or clearing, payment, money or value transfer services and securities settlement system operator or provider;
(b) require any clearing, payment, money or value transfer services and securities settlement systems as well as operators or providers directly or indirectly involved in such systems to observe safe and sound conditions and requirements as may be established by the Bank;
(c) regulate and supervise the issuance and quality of payment instruments; and
(d) regulate and supervise electronic payments services providers and money or value transfer service providers.
[24 of 2022, s. 29.]
(3) Any person who contravenes regulations made under this section shall be liable to a fine not exceeding P1 000 000 or to imprisonment for a term not exceeding five years.
[24 of 2022, s. 29.]
PART VIII
Regulation of Companies which have Applied for or been Issued with a Tax Certificate (ss 44-53)
[19 of 1999, s. 3.]
For purposes of this Part—
“company” means—
(a) a body corporate constituted under the laws of Botswana or of any other jurisdiction; and
(b) a collective investment undertaking as defined under the Collective Investment Undertakings Act (Cap. 56:09).
[19 of 1999, s. 3.]
(1) This Part shall apply to a company which has applied for or been issued with a tax certificate (hereinafter referred to as “the tax certificate”) in accordance with section 138(2) of the Income Tax Act (Cap. 52:01).
[2 of 2007, s. 107.]
(1A) This Part does not apply to a non-bank financial institution licensed in terms of the Non-Bank Financial Institutions Regulatory Authority Act, and does not affect any powers granted to the Bank in relation to banks and other companies.
[2 of 2007, s. 107.]
(2) The provisions of this Act which relate to examination of books and records and the furnishing of information shall apply to a company to which this Part applies by virtue of subsection (1).
[19 of 1999, s. 3.]
(3) Nothing contained in this Part shall affect any powers, with regard to the grant of authorisations or licences or their revocation, to be exercised by virtue of the existing law or of any other legislation by the Bank in relation to any bank, credit institution, stock broking, financial futures and options exchange, financial institution or intermediary, fund, collective investment undertaking or any other company.
[19 of 1999, s. 3.]
Where the Bank is of the opinion, after consultations with such government ministries as the Bank considers it appropriate to consult with, that there are adequate supervisory and inspection provisions contained in any enactment relating to a company, then the Minister may by regulation specify the enactment concerned and where necessary in the context of that enactment, the company or class or type of company, to which the regulation relates and accordingly the relevant supervisory and inspection provisions of this Part shall not apply to a company to which the regulation relates.
[19 of 1999, s. 3.]
47. Supervisory and inspection powers
(1) The Bank may regulate, inspect and supervise a company to ensure its compliance with this Act in regard to the operations described in its tax certificate.
[19 of 1999, s. 3.]
(2) For the purposes of subsection (1), the Minister, after consultation with the Bank, may make regulations setting out such supervisory and reporting requirements relating to such company as the Bank considers prudent to impose on it from time to time for the purposes of the proper and orderly conduct of a company and the development of a financial services centre.
[19 of 1999, s. 3.]
(3) A company shall comply with the conditions contained in the tax certificate and with regulations issued by virtue of this Part.
[19 of 1999, s. 3.]
(4) The supervisory and inspection requirements and conditions of the Bank shall not—
(a) constitute a warranty as to the solvency of a company or entity forming part of a company; and
(b) make the Bank liable in respect of any loss incurred through the insolvency or default of a company.
[19 of 1999, s. 3.]
(1) The Bank may appoint its officer or employee to undertake an on-site inspection of the operation and affairs of a company, and, if the Bank so specifies, any foreign office of such company in order to determine whether or not the company is conducting its business in a lawful and prudent manner.
[19 of 1999, s. 3.]
(2) An officer of the Bank conducting such an inspection under subsection (1) may—
(a) examine all books, minutes, accounts, cash securities, vouchers, computer records and any other documentation and data whether in electronic form or otherwise; and
(b) require such information concerning its business or that of its affiliate whether in Botswana or abroad as considered necessary or desirable.
[19 of 1999, s. 3.]
(3) A company shall comply with the requirements made pursuant to subsection (2).
[19 of 1999, s. 3.]
(4) Where a company fails to produce a document or data, whether in electronic form or otherwise, to the officer of the Bank, within 28 days of the demand, the company shall be guilty of an offence and liable to a fine not exceeding P5 000.
[19 of 1999, s. 3.]
(1) The Bank may recommend—
(a) to the Minister, the revocation of a tax certificate issued under section 138(2) of the Income Tax Act (Cap. 52:01), where—
(i) the Bank considers that such a company has failed to comply with an order, directions or regulations made under this Part and the degree of non-compliance is sufficiently serious to warrant revocation;
(ii) it appears to the Bank that the company is carrying on business in a manner which is contrary to, detrimental to, the interests of the public;
(iii) a person purporting to act on behalf of the company, is convicted by a court of competent jurisdiction, in Botswana or elsewhere, of an offence relating to the proceeds of a serious crime;
(iv) the company has contravened a provision of an Act or regulation governing its formation or operations; or
(b) to the appropriate body, the revocation, in accordance with the enactment under which a licence was issued to any company, of such licence.
[19 of 1999, s. 3.]
The Bank may, under conditions of confidentiality, disclose information to regulatory authorities in foreign jurisdictions for the purpose of assisting them to exercise functions corresponding to those of the Bank under this Part.
[19 of 1999, s. 3.]
The Bank may at its absolute discretion levy administration fees against a company to assist the Bank to recoup the expenses incurred by it in performing its duties under this Part, provided that the amount of such fees shall be established and notified to such a company annually in advance.
[19 of 1999, s. 3.]
Where an offence is committed by a company or a person purporting to act on behalf of a company and is proved to have been committed with the consent of, or to have been facilitated by any wilful neglect on the part of, another person being a director, manager, secretary, member of a committee of management or other controlling authority of such body or official of such body, that person shall be guilty of an offence and shall be liable to be proceeded against and punished accordingly.
[19 of 1999, s. 3.]
A person who contravenes any provision, fails to comply with a requirement or condition imposed under this Part, or a direction by the Bank made in accordance with the provisions of this Part, shall be guilty of an offence and liable to a fine not exceeding P2, 500, 000 or to imprisonment for a term not exceeding three years and if the contravention or failure to comply with a requirement, condition or direction is continued after the conviction, the person shall be guilty of a further offence and liable to a fine not exceeding P5 000 for every day on which the offence is so continued.
[19 of 1999, s. 3.]
PART IX
Relations with Government (ss 54-65)
54. Banker, fiscal agent of and adviser to Government
(1) The Bank shall act as banker and financial adviser to, and fiscal agent of, Government.
(2) It shall be the duty of the Bank, through the Minister, to render advice and to furnish reports on matters relating to the objectives of the Bank and concerning any matter which, in its opinion, is likely to affect the achievement of the objectives of the Bank.
54A. Co-operation with Government and other authorities
(1) The Bank shall co-operate with the Government and any other public agency in Botswana or abroad in pursuing its objectives and the Bank may conclude written agreements of co-operation and memoranda of understanding.
[24 of 2022, s. 30.]
(2) The Governor shall hold regular meetings and at least on a biannual basis with the Minister to consider management of foreign exchange reserves, monetary and fiscal policies and other matters of common interest and the Governor and the Minister shall keep one another fully informed of all matters that affect the Bank and the ministry jointly.
[24 of 2022, s. 30.]
(3) The Bank shall be consulted by the Government on any draft law concerning matters that relate to the objectives of the Bank or that otherwise are within the Bank’s field of competence, before being submitted to the National Assembly.
[24 of 2022, s. 30.]
54B. Establishment of Financial Stability Council
(1) There is hereby established a Financial Stability Council (hereinafter referred to as the “Council”) which shall be responsible for—
(a) preserving the stability of the financial system;
(b) ensuring co-operation between its members with respect to the assessment of the build-up of economic and financial sector systemic risks in Botswana;
(c) developing co-ordinated policy responses to risks including crisis management; and
(d) making recommendations, issuing warnings or opinions addressed to regulatory bodies regarding financial institutions.
[24 of 2022, s. 30.]
(2) The Council shall comprise of the—
(a) Governor;
(b) Permanent Secretary in the ministry responsible for finance;
(c) Chief Executive Officer of the Non-Bank Financial Institutions Regulatory Authority;
(d) Director of the Deposit Insurance Scheme; and
(e) Director General of the Financial Intelligence Agency.
[24 of 2022, s. 30.]
(3) The meetings of the Council shall be chaired by the Governor and the Bank shall act as the Secretariat of the Council.
[24 of 2022, s. 30.]
(4) The Council shall adopt decisions by a simple majority of the members present and voting at the meeting and, in the event of an equality of votes, the Chairperson shall have a casting vote in addition to his deliberate vote.
[24 of 2022, s. 30.]
(5) The Council shall regulate its own proceedings.
[24 of 2022, s. 30.]
55. Bank depository of Government funds
(1) The Bank shall be the official depository of Government funds:
Provided that Government may maintain accounts in Botswana with and generally use the services of financial institutions in such cases and on such terms and conditions as may be agreed between the Minister and the Bank.
(2) Unless the Government and the Bank shall otherwise agree, the Bank shall receive from Government, and disburse on its behalf, Government moneys and keep account thereof without remuneration for such services:
Provided that no interest shall be required to be paid by the Bank on Government balances held with the Bank unless the Bank and the Government otherwise agree.
(3) The Bank may maintain and operate special accounts for Government, including trustee accounts, in accordance with arrangements made between Government and the Bank.
56. Management of Government securities
The Bank shall be entrusted, upon such terms and conditions as may be agreed with Government, with the issue and management of Government securities or securities guaranteed by Government which form a public issue.
The Bank may act as agent for Government for such purposes and on such terms and conditions as may be agreed between Government and the Bank.
58. Banker and fiscal agent to Government boards and agencies
The Bank may act as banker and fiscal agent to statutory and wholly-owned Government corporations or Government controlled corporations and to local authorities on such terms and conditions as may be agreed between the parties concerned, with the approval of the Minister.
59. Borrowings by Government and public bodies, etc.
Prior to any borrowing from a source other than the Bank, Government and every statutory or wholly-owned Government corporation, Government controlled corporation or local authority shall seek the advice of the Bank concerning the timing, terms and conditions of such borrowing and shall promptly notify the Bank of the terms and conditions of any such borrowing subsequently entered into:
Provided that the Minister may prescribe minimum amounts below which such borrowers shall not be required to seek the advice of the Bank to proposed borrowings in Pula.
Subject to the provisions of any other written law, the Bank may grant temporary advances to Government subject to repayment within six months following the end of the financial year in which they were granted, at such rates of interest as may be agreed between the Bank and the Minister.
61. Transactions in Government securities
The Bank may purchase and sell securities issued or guaranteed by Government which form part of a public issue.
62. Prohibition on lending to Government
(1) Subject to section 68(2), the Bank shall not grant any direct or indirect credit to the Government or any other public agency or Government owned entity, with the exception of an intra-day credits, to secure the smooth functioning of the payment system and such intra-day credit shall be fully repaid before the end of the same day.
[24 of 2022, s. 31.]
(2) Subsection (1) shall not apply to publicly owned banks and other publicly owned entities, which shall be given the same treatment as privately owned banks and other privately owned entities.
[24 of 2022, s. 31.]
(3) Notwithstanding subsection (1), the Bank may purchase Government securities provided that such purchases are only made in the secondary market, as provided for under subsection (5).
[24 of 2022, s. 31.]
(4) Notwithstanding the above subsections, the Bank may grant temporary advances to the Government for a period not exceeding 92 calendar days:
Provided that such advances are provided on terms with market-related interest rates prevailing in Botswana.
[24 of 2022, s. 31.]
(5) The total outstanding advances, credit facilities or guarantees of the Bank to the Government shall not exceed five per cent of the annual average of the Government ordinary revenue for the three financial years immediately preceding for which audited accounts are available.
[24 of 2022, s. 31.]
(6) The Bank shall be prohibited from granting any advances beyond the conditions as provided in subsections (4) and (5).
[24 of 2022, s. 31.]
63. Agent for the administration of exchange control
(1) The Bank shall act as agent for Government in the administration of any law in force relating to exchange control, in accordance with such regulations, instructions and directives as the Minister may from time to time issue for this purpose.
(2) Returns, statements, accounts or information required to be submitted to the Minister under the provisions of any such law shall be transmitted through the Bank.
64. Depository and fiscal agency for international financial organisations
The Bank shall, upon designation by the Minister, serve as the depository of, and the fiscal agency through which dealings shall be conducted with, any international financial organisation of which Botswana is a member.
65. Policy directives by the President
(1) If the Minister is of the opinion that the policies being pursued by the Bank are not conducive to the achievement of the objectives of the Bank, the Minister and the Governor shall make an attempt to reach a written agreement on the Bank’s policies.
[24 of 2022, s. 32.]
(2) If the Minister and the Governor are unable to reach a written agreement, the Minister may, in case he is of the opinion that it is necessary for the co-ordination of monetary, fiscal and economic policies and after consultation with the Governor, submit to the President and to the Bank a copy of the recommendations.
[24 of 2022, s. 32.]
(3) The Bank shall if it has any objection to the recommendations under subsection (2), submit in writing, the objections to the President within three days of receiving the recommendations, until the dispute is resolved and the policy as determined by the Bank shall subsist.
[24 of 2022, s. 32.]
(4) The President shall—
(a) by directive, determine the policy to be adopted by the Bank within a period of three months from the date of receipt of the Bank’s submission; and
(b) inform the Bank through the Governor in writing, of the policy so determined.
[24 of 2022, s. 32.]
(5) The Bank shall thereupon give effect to the policy as determined while the directive shall remain in operation.
[24 of 2022, s. 32.]
(6) The Minister shall publish in the Gazette and the media and cause to be laid before the National Assembly, within 15 days after the President has informed the Bank through the Governor of the policy so determined of—
(a) the directive referred to under subsection (4);
(b) the recommendation submitted to the President under subsection (2); and
(c) the written objection of the Bank submitted to the President under subsection (3).
[24 of 2022, s. 32.]
(7) If the President does not issue a directive to determine the policy to be adopted by the Bank within a period of three months, the recommendation of the Minister shall be considered to have lapsed.
[24 of 2022, s. 32.]
PART X
Accounts, Financial Statements and Financial Year (ss 66-68)
66. Accounts, records and financial year
(1) Without prejudice to section 5A and to the extent possible to achieve its objectives, the Bank shall maintain accounts and records in accordance with the national and International Financial Reporting Standards to reflect its operations and financial condition.
[24 of 2022, s. 33.]
(2) The financial year of the Bank shall begin on 1st January and end on 31st December.
[24 of 2022, s. 33.]
(1) The accounts, records and financial statements of the Bank shall at least once a year be audited in accordance with the International Standards on Auditing by independent external auditors which shall be of good repute and with recognised experience in the auditing of major international financial institutions.
[24 of 2022, s. 34.]
(2) On the recommendation by the Board, the external auditors shall be approved by the Minister and subsequently appointed by the Board and no external auditors shall be appointed for more than two consecutive terms of five years.
[24 of 2022, s. 34.]
(3) The Board may dismiss the Bank’s external auditors for good cause, subject to the approval of the Minister.
[24 of 2022, s. 34.]
(4) The external auditor shall report to the Audit Committee of the Board and ultimately to the Board on key matters arising from the audit and in particular on material weaknesses in internal control in relation to the financial reporting process as laid down in the Audit Committee Charter.
[24 of 2022, s. 34.]
(5) Without prejudice to subsection (2), the Auditor General shall, if so requested by the Minister, examine and report on the operational efficiency of the management of the Bank and the Bank shall provide the Auditor General with all necessary and proper facilities thereof.
[24 of 2022, s. 34.]
(1) There shall be an Audit Committee of the Board which shall be chaired by a non-executive member of the Board and may include non-Board members and shall be responsible for—
(a) the review, management and audit of the financial statements of the Bank;
(b) making recommendations to the Board concerning accounting and auditing policies, financial controls; and
(c) the appointment of auditors.
[24 of 2022, s. 35.]
(2) The Audit Committee shall consist of three non-executive members who shall have competence in accounting or auditing.
[24 of 2022, s. 35.]
68. Annual financial statements and reports
(1) The Bank shall prepare financial statements for its financial year.
[24 of 2022, s. 36.]
(2) The Bank shall, within three months after the close of its financial year, submit to the Minister—
(a) financial statements approved by the Board, signed by the Governor and certified by an external auditor; and
(b) a report approved by the Board, of its operations and affairs during the financial year that just ended in particular in relation to its policy objectives and the events that affected the economy of the country.
[24 of 2022, s. 36.]
(3) The Minister shall, within 30 days after receipt of the annual financial statements, cause a copy of such annual financial statements and the report of operations to be laid before the National Assembly.
[24 of 2022, s. 36.]
(4) The Bank shall publish the financial statements referred to under subsection (2) and the audited financial statements on its website.
[24 of 2022, s. 36.]
(5) The Bank shall as soon as possible, after the last working day of each month, prepare and publish a balance sheet as at the end of that month and copies of such balance sheet shall be transmitted to the Minister and be published in the Gazette and the Banks website.
[24 of 2022, s. 36.]
PART XI
General (ss 69-74)
(1) Except as otherwise provided in this Act, the Bank shall not—
(a) engage in trade, purchase the shares of any corporation or company, including the shares of any financial institution, or otherwise have an ownership interest in any financial, commercial, agricultural, industrial or other undertaking, except as the Board may deem necessary for the training or welfare of its staff;
(b) acquire by purchase, lease or otherwise any real right in or to immovable property except so far as the Bank considers necessary or expedient for the provision of premises for the conduct of its business or housing, welfare facilities for its staff and similar requirements incidental to the performance of its functions under the provisions of this Act;
(c) make unsecured advances except as provided in section 38(3)(b) or in subsection (4);
(d) make advances secured otherwise than as set forth in this Act;
(e) except as provided in sections 31, 33, 34, and 38(3)(b) or in subsection (2), accept shares as security;
(f) make loans or issue guarantees of any kind that are not fully and adequately secured.
(2) Nothing in this section shall prevent the acquisition by the Bank in the course of satisfaction of debts due to it or any interests referred to in subsection (1)(a) or rights referred to in subsection (1)(b):
Provided that all such interests or rights so acquired shall be disposed of at the earliest suitable opportunity.
(3) Notwithstanding the provisions of subsection (1), the Bank, with the approval of the Minister, may establish pension plans or provident funds or similar schemes for the benefit or protection of officers and employees and their dependants and nominees, and may make contributions to any such fund or scheme subject to such terms and conditions as shall be prescribed by the Board.
(4) Notwithstanding the provisions of subsection (1) and subject to such terms and conditions as shall be determined by the Board, the Bank may—
(a) grant advances to any of its officers or employees for such purposes and in such amounts as the Board may approve; and
(b) with the approval of the Minister, acquire shareholding in any company or establish such subsidiaries as may be necessary for the purpose of insuring deposits, including prescribing the establishment of any deposit insurance scheme, to promote the development of money or securities market in Botswana or to generally ensure financial stability in Botswana.
[24 of 2022, s. 37.]
70. Bank may call for information
(1) For the purposes of the administration of this Act and in the proper performance of its functions under this Act, the Bank may call for such information as it may require from any person.
(2) Any person who fails to supply any information called for by the Bank under subsection (1) or who supplies any false or misleading information shall be guilty of an offence and shall be liable to a fine not exceeding P500 000 or to imprisonment for a term not exceeding five years, or to both.
[24 of 2022, s. 38.]
71. Exemption from Banking Act
The Bank shall not be subject to any of the provisions applicable to financial institutions under the Banking Act (Cap. 46:04).
72. Exemption from taxes, etc.
The Bank shall be exempt from the payment of any taxes, levies and duties other than—
(a) duties leviable under the Customs and Excise Duty Act (Cap. 50:01); and
(b) rates levied under the Town or City Council Regulations (Cap. 40:02 (Sub. Leg.)) but including, without prejudice to the generality of the foregoing, stamp and transfer duty on any of its transactions, operations, property and documents, as the case may be, and any tax or levy on its income or profits.
No matter or thing done or omitted to be done by a member or staff of the Bank shall, if the matter or thing is done or omitted to be done in good faith in the course of the performance of the functions of the Bank, render that member or staff liable to an action, claim or demand.
[24 of 2022, s. 39.]
72B. Restriction on execution against property of Bank
Notwithstanding anything to the contrary contained in any law, where a judgment or court order is obtained against the Bank, no execution, attachment or process of any nature shall be issued against the Bank or against property of the Bank and the Governor shall cause to be paid out of the funds of the Bank, such amounts of money as may, by judgment or court order, be awarded against the Bank to the person entitled to the money.
[24 of 2022, s. 39.]
(1) The Bank shall have a first ranking unconditional preferential right to satisfy each of its claim arising from the execution of its function from any cash balances, securities and other assets that it hold for the account of the debtor concerned, whether as collateral to secure its claims or otherwise, at the time that such claim becomes due and payable.
[24 of 2022, s. 39.]
(2) The Bank may exercise its preferential right only by appropriating the cash balances by way of compensation and by selling securities and other assets without undue delay and against a reasonable price and paying itself from the proceeds of the sale after deducting therefrom the costs associated with the sale.
[24 of 2022, s. 39.]
(3) No court action shall be required and no competing claim shall be permitted to delay the exercise by the Bank of its preferential right in terms of this section.
[24 of 2022, s. 39.]
The Minister may, after consultation with the Bank, make regulations for the better carrying out of the purposes and provisions of this Act, or to give force or effect to its provisions, or for its better administration.
(1) The Bank of Botswana Act (Act 7 of 1975) is hereby repealed.
(2) Any subsidiary legislation made under and in accordance with the provisions of the Bank of Botswana Act shall continue to have force and effect as if made under the provisions of this Act to the extent that it is not inconsistent with such provisions, until revoked or amended by or under this Act.
(3) Any thing done under or in pursuance of the provisions of the Bank of Botswana Act shall, insofar as it is not inconsistent with the provisions of this Act, continue to have force and effect as though it were done under or in pursuance of the provisions of this Act.