Monday, August 8, 2022

Commercial banks urged to localise decision making

The Governor of the Bank of Botswana (BoB), Linah Mohohlo, is on a campaign trail and looks set to stop at nothing to push for localising decision making within the domestic banking industry.
She fired the first salvo at the banking industry during the launch of the government’s first tranche of the P5 billion bond programme.

In the presence of Stanbic Bank Managing Director, Dennis Kennedy, and his deputy, Leina Gabaraane, Mohohlo said to their faces how irked she was to learn that Stanbic Bank Botswana tasked staff from South Africa with listing preparations at the expense of citizens. She wondered why the task could not be done by the staff from the country, in view of the fact that the Central Bank has the capability to assist and mentor them.

Stanbic was appointed the Sole Financial Advisor in respect of the establishment of the bond.

On Wednesday, during the launch of Capital Bank, Mohohlo (who is due to retire by the end of the year) was on her usual campaign trail. Even though Capital Bank is the only commercial bank in the country to have been established with citizen shareholders, Mohohlo still had a word of caution.

“While a parent bank has the responsibility to makemajor policy decisions affecting the group, it is
crucial that, within this hierarchical structure, important decisions relating to the day-to-day operations of a subsidiary bank are made in the host country, and not referred on a regular basis to either regional or head offices abroad,” she lamented.

Referring a majority of major operational decisions to the parent company would only serve to weaken local management “as they will be denied the opportunity to make decisions on the operation of the local business.

The fact is that staff will not realise theirpotential unless there is an enabling environment forthem to discharge their responsibilities. Some, if not all, of your staff are skilled individuals, and I knowthat I am speaking to the converted, when I say thatsuccessful companies revolve around their people, so long as they are equipped with the requisite abilityand room to perform. From this perspective, you areencouraged to identify the best of our citizen stafffor key positions in your staff complement, obviouslynot at the expense of competence, efficiency andeffectiveness,” she emphasised.

She further urged Capital Bank’s local Board ofDirectors to have corporate responsibilities thatinclude the ability to make independent judgments in
adjusting business strategies and operations in linewith local market conditions.

Capital Bank is a subsidiary of First Merchant Bank of Malawi and was granted a commercial banking licence in December last year. First Merchant Bank is
headquartered and operates in Malawi and owns 51 percent of the shares in Capital Bank while the remaining 49 percent of the shares are held by
citizens and residents.


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