Banks charged for breaking the law

One bank was charged for violating three sections of the Banking Act Another was charged for not declaring large cash transactions A third bank escaped with a warning The Bank of Botswana (BoB) has charged four banks for contravening various sections of the Banking Act and the Financial Intelligence (FI) Act over the past year, The Business weekly & Review has established. Consequently, a monetary penalty amounting to P85 973.90 was imposed on three banks while one bank escaped with just a caution. [ihc-hide-content ihc_mb_type="show" ihc_mb_who="1,2,3,4" ihc_mb_template="1" ] According to information obtained from the Bank of Botswana’s (BoB) Banking Supervision Report, the first bank did not submit audited financial statements to BoB for fiscal years ended 31 March 2020 and 2021. The bank’s financial statements were not submitted to the central bank because the bank had terminated its contract with its auditors and no appointment for auditors was made. “The reason for termination of the contract was high audit fees,” states the report. “The bank has since appointed a new external auditor for three years effective from March 31, 2021.” This particular bank is said to have violated Section 19(2) of the Banking Act but no charge was levied against it. “The bank was cautioned, and the importance of ongoing compliance emphasised,” the report says. The second bank was also found to have contravened the Banking Act, specifically Section 13(1) of the Act. It was established that the Capital Adequacy Ratio (CAR) for the bank was below the 12.5 percent minimum, at 11.7 percent, 11.5 percent, and 11.8 percent in May, June and July 2021 respectively and was consequently fined P14 573.90. The third one was charged for contravening Section 16(1) of the Banking Act and the Directive on Managing Liquidity Risk. This is because it found that it maintained a daily liquid asset ratio of 9.7 percent on both 17 and 21 December 2021, thus below the 10 percent statutory limit. “No charge was levied against the bank,” says the report. “The bank has been written caution letters and has since normalised the situation.” This particular bank was further found to have contravened two other sections of the Banking Act. It violated Section 52 of the Banking Act for which it was fined P3 000 because it did not address the 2019 supervisory concern relating to a board member whose tenure had exceeded the set 90-year limit and retirement age. The bank was additionally charged for contravening Section 25(3) of the Banking Act by providing misleading information in contradiction with this particular provision of the Act. A fine of P68 400 (VAT inclusive) was levied against the bank and was paid at the rate of P11 400 per month for the six months from January 2021 to June 2021. The fourth bank was the only one among the four that was charged with violating the FI Act, in particular Section 34(2) of the Act. It was charged for failure to report cash transactions above the prescribed limit. According to the supervision report, this bank was requested to show cause why a charge of P100 000 in accordance with Section 34(2) of the FI Act should not be levied against it for failing to report all large cash transactions to FIA. [/ihc-hide-content]

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Banks charged for breaking the law

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