Wednesday, November 29, 2023

Gov’t flip-flop on FNBB statement

The Ministry of Tertiary Education, Research, Science and Technology had to backtrack on a statement it made three weeks ago after it emerged that it irked one of the biggest banks in the country.

The latest development came clearer on Friday when junior minister at the Tertiary Education, Fidelis Molao made a statement of correction to parliament regarding a previous answer he had made to Specially Elected MP Bogolo Kenewendo’s question.

Kenewendo, who has since been promoted to be the new minister of Investment, Industry and Trade had asked the Ministry of Tertiary Education, Research, Science and Technology to clarify for her how the student allowance disbursement account worked and what was First National Bank Botswana’s value proposition that led them to winning the lucrative multi-billion tender.

In his answer Molao outlined the costs and benefits associated with the tender, and stated that students are not charged service fees.

Kenewendo then put it to the assistant minister that students are actually charged service fees associated with their accounts and transactions. The cross interrogation between Kenewendo and Molao ended with the later promising to look further in the matter to ascertain if students are charged service fees.

Molao’s assertion that students are not charged service fees created uncertainties and threatened to open a can of worms as it appeared if the biggest bank in the country was in violation of its contract with government. However FNBB acted swiftly to put it in record that they were not violating their contract, and that in fact they do charge fees as stipulated in the service contract.

The assistant minister says he regrets the inconvenienced caused when he made a misleading statement previously. “When answering the questions about benefits transferred to students, i erroneously stated that no service charges were levied against students,” he said.

“The actual response should have been students benefit from subsidized service charges as compared to the service charges the bank will normally charge its customers.”

Molao said while the bank’s normal monthly service charge is P11.25, the students are charged P6 monthly. For Visa debit card purchases, students are charged P1.02 instead of P1.30, while for cash withdrawals the students pay P1.50 compared to P2.50, and for cellphone banking the students get access to it for P4.32 instead of P4.81.

The assistant minister could not give a clear answer to Haskins Nkaigwa’s follow up question as to why the service fees are charged to students while the government pays P99, 000 to FNBB every month.

Besides the student’s disbursement account, FNBB also has a tender for disbursing payment to interns and for the target 20, 000 beneficiaries. The Steven Bogatsu led bank is the biggest in the country in terms of assets and profitability and has dominated the banking landscape for over a decade. The bank boasts of the largest footprint with a network of more than 149 ATMs and 23 branches. The bank is also a leader in technology with mobile and internet banking, as well as deposit taking ATMS.

The Bank which has been operating in Botswana since 1991 is also listed on Botswana Stock exchange (BSE). FNBB has the largest market capitalisation on the BSE’s domestic counter at P5.8 billion, and the stock which has been losing value over the past two years closed the first quarter of the year down by 3.9 percent at P2.25.


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