Monday, January 24, 2022

NBFIRA develops risk based regulatory model

Government has received financial assistance from the African Development Bank (AfDB) to improve the soundness, efficiency, reach and depth of the non-bank financial services sector in Botswana through development and implementation of a Risk Based Regulatory Model (RBRM).

The financial assistance will enhance the non-bank financial services sector’s contribution to economic growth and financial stability in the country. Oaitse Ramasedi, Chief Executive Officer (CEO) of the Non-Bank Financial Services Regulatory Authority (NBFIRA) said the project will develop the institutional capacity of the Authority by financing activities that will strengthen and modernize the regulatory and supervisory frameworks for non-bank financial institutions. He mentioned different institutions including insurance, pensions, capital markets, finance and leasing companies, micro-lenders and any other related sectors.

“The overall objective of the project is to equip the nonÔÇôbanking financial services sector with a Risk Based Regulatory Model (RBRM) in line with international best practice. A risk based approach to regulation creates a common basis of analysis and approach, to all industries regulated within the NBFI sector,” said Ramasedi.

He added that the specific objective of this component of the project is to develop an IT system that will effectively support the developed risk based regulatory model. He emphasized that NBFIRA has set up a project team that is responsible for implementation of project activities, comprised of staff from the department of capital markets, insurance, pensions, and IT. A project team leader has also been appointed to lead the work of the project.

“The ongoing RBS system is anticipated to provide an effective and efficient platform for the regulated entities to submit information to the Authority in a timely manner, which is critical to for its operations,” he said.

Ramasedi believes the program will empower the regulatory authority to have updated and sufficient records for industry players. With respect to internal processes, the Authority will find it easier to allocate work and monitor it using the live system.

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