The Central Bank, Bank of Botswana (BoB) has confirmed the upcoming amendment of the current Banking Act which was enacted in 1995.
Since then, new regulatory challenges have emerged due to developments in both domestic and global financial systems and regulatory environment.
The bank Governor Moses Pelaelo says that the proposed amendments are necessary, among others with respect to the removal of obstacles to conducting consolidated supervision both across borders and domestically given the advent of diversified banking groups.
He added that there are new developments such as implementation of new regulatory and supervisory standards, notably Basel II and III. He also spoke of granting the Bank greater flexibility for amending prudential regulations in line with evolving best practices and policy priorities.
“There is need for enhancement of the legal framework and central bank powers for handling problem bank resolution and a systemic banking crisis; and providing for the sharing of relevant information among internal and external regulators and oversight authorities,” he stated.
Pelaelo further said that with the regards the Bank of Botswana Act, revisions are necessary to strengthen the operational and accountability framework of the Bank. He stated that the legislation is also being amended to incorporate an explicit financial stability objective and to improve processes for emergency lending powers of the Bank when required.
“There is also a need to legislate for oversight with respect to payments, clearing and settlement systems, infrastructure and service providers and facilitate new payment methods,” said Pelaelo.
He is of the view that the necessary consultations will, as usual, be undertaken during the review.