Wednesday, October 28, 2020

Govt ceases using Central Bank as a retail bank

Government said this week that in pursuit of prudent financial management and as a measure to be in line with international best practice, it will, with effect from October 1, 2011 cease to use Bank of Botswana (BoB) as a retail bank.

In a statement, the Ministry of Finance and Development Planning said the move means that the Central Bank will no longer encash cheques over the counter at the Bank of Botswana Banking Halls in Gaborone and Francistown.

The move will also boost the private sector banking in the country and in line with the developments in the banking sector, the Ministry of Finance and Development Planning and the Bank of Botswana have, ‘therefore, found it appropriate to discontinue the provision of retail banking by the Bank of Botswana in light of these developments’.

“Over the years, there has been a significant increase in the number of banks in Botswana and technological innovations have brought about new, faster, efficient and secure methods of payments, including Electronic Funds Transfers (EFTs) and Real Time Gross Settlement (RTGS) for large payments,” the Ministry said.

It, however, pointed out that all cheques drawn on Bank of Botswana already issued by Office of The Accountant General will continue to be encashed at the Bank of Botswana Banking Halls until December 31, 2011.

“In the meantime, members of the public are, therefore, encouraged to open bank accounts at banks in preparation for the impending changes.”

Under the new arrangement, all payments to government employees in respect of salary advance, gratuity payments, travelling imprest, leave payments, off-campus allowances, claims, sitting allowances, travel concession and any other payment as the Office of The Accountant General may determine from time to time, will be paid electronically into the payee’s bank account.

“Likewise, suppliers of goods and services to Government shall be paid by electronic payment methods,” the ministry advised.

The government has also opened transaction accounts with Barclays Bank and Bank Gaborone to facilitate cash withdrawals, through cheques drawn on commercial banks on exceptional circumstances.

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