Sunday, July 14, 2024

BBS smiles all the way to become commercial bank

Although the Minister responsible for Finance and Economic Development, Kenneth Matambo recently told Parliament that a sizeable number of Batswana have in the past made applications to start banks but were unsuccessful, signs are clear that the country will soon get its first indigenous bank. 
This week, the Managing Director (MD) of Botswana Building Society (BBS), Pius Molefe has expressed optimism that the institution will not fail to obtain a banking license. 
Responding to questions posed by one of the Building Society’s members during a special meeting called for the conversion of BBS from its original society owned by its members and regulated by its ‘Rules and the Society’s’ Act into BBS Limited, a company owned by its shareholders and regulated by a constitution and Companies Act.
Molefe said the Society qualifies to apply for a banking license as qualification for the license is P5million while BBS is valued at P4billion. 
He said there is no need to ask for waiver from the Central Bank as his institution has had several bilateral and trilateral meetings to ensure the conversion goes well. He explained that the management engaged experts, the Price Water House Coopers when they started the journey of conversion.
“The institution is in a good stance. We do not see us failing once we have taken up banking. We are already operating as a bank. We are saving our clients’ finances, we are granting loans. We are limited by the Societies Act to provide such services as Forex.  As a bank we will be adding more products like Debit, Visa/Master cards,” said Molefe. 
This, he said would definitely see the bank expanding its work force. The institution has 220 staff members currently. The conversion would mean that more training of the existing be provided for it to be successful.
“There will be need for recruitment and we know there is graduates who are unemployed who we can recruit from. Of course we will also recruit from other commercial banks. Also, Batswana want to have their own indigenous bank and this is their bank,” he said.
As for benefits of voting for the conversion by members it was explained that qualifying members, who would have been with the BBS for a year and more, owning either indefinite period shares, fixed period shares or subscription shares in society will be given the option to acquire shares in BBS Limited up to a 15 per cent shareholding in the Demutualized company, as par value of P1 each against the nominal value of their shares in BBS. The remainder will be converted into deposits in BBS Limited
An unidentified shareholder had asked the MD and his staff to explain whether right procedure has been followed to apply for a banking license; what the value of BBS is such that there could be application for waiver in case the BBS fails to qualify. There also was query as to how funds would be divided among members.



Read this week's paper