Long live the cheque!

Mbongeni Mguni | Friday February 14, 2014 15:13

 

The cheque might live to see another day as Bankers Association of Botswana CEO, Oabile Mabusa, reveals to Staff Writer, MBONGENI MGUNI that plans are underway to shorten its settlement period.

BusinessWeek: What were the major highlights of the year for the Association and the industry last year?

Mabusa: I joined the BAB in 2012 to establish its first Secretariat office. Some of our achievements during the first year include the establishment of a corporate structure, along with the necessary basic systems and procedures. Last year, 2013, was a year of consolidation for the Association in that we successfully established the BAB office and put in place governance arrangements necessary for the proper operation of the office. For example, a strategy framework was drawn up for the Association and was approved by the Association’s governing body, the BAB Council.

Management and administrative systems were put in place towards the fulfillment of mandatory corporate and statutory filings, such as budgeting systems, annual financial statements and annual statutory returns. With a skeletal staff now in place, the Association is well set to face bigger and growing challenges as they unfold.

BusinessWeek: What were your objectives coming into the position as the debut BAB CEO and what has been the progress in achieving these?

Mabusa: Other than the need to establish an effective organisation, which is a given, we had three main objectives. These were to represent the unified banking industry on matters of common interest, to maintain a high level of public awareness and education; and to be recognised as the voice and sounding board for the banking industry.

We have recorded a comfortable margin of headway in our efforts to achieve the second objective, particularly with regard to building bridges with institutional stakeholders.

In relation to the first objective, you might be aware that we have occasionally interacted with the media to disseminate information on a number of banking related topics, particularly those affecting the average consumer of banking services. The outreach generated some public interest, though it was not sustained. I must admit however, that we still fall far too short of meeting our target in terms of reaching out to the average consumer. This is an aspect on which we will be concentrating our efforts this year.

Our advocacy efforts targeting institutional stakeholders have gradually deepened. We have established formal dialogue relationships with various government organs, including the Ministries of Finance and Development Planning, Labour and Home Affairs, Local Government and the Directorate on Intelligence Services, Public Procurement and Asset Disposal, and more. As our stakeholder engagements are issues-based, the Association’s outreach initiatives will be expanding as we conclude assignments and explore further issues.

BusinessWeek: What major challenges does the Association face and how is it tackling them?

Mabusa: Being a young organisation, the only major challenge that we face is inadequate human resource capacity. But this is normal. The reason for this is that the scope of our mandate and, therefore, the activities that we have to engage in to fulfill that mandate, is quite significant. Even as we face the resource challenge, our growth has to be organic in order to avoid overgrowing the mandate.

BusinessWeek: What major projects is the Association working on and could you also provide us with your view on the major trends in the sector?

Mabusa: Let me begin with a few notable trends affecting the banking sector. The first point to note is the new excitement brought by the recent growth in the number of banks in the market following the entrance of Bank of India (Botswana) and State Bank of India (Botswana). This development will spur up competition through which customers should expect to see more product innovations leading to the overall enhancement of value for customers. Secondly, we expect that the banking sector will see some positive developments arising from the recent announcement of two major reforms in the budget speech, namely; the removal of VAT on first-time home acquisitions and the intended recognition of tribal land as financial collateral. The Association is pursuing a number of projects, some of which involve other stakeholders in the market. These are the main ones:

l Cheque Imaging and Truncation Project

The Association, in collaboration with Bank of Botswana, is implementing a project to completely automate the cheque clearing process. Unlike currently whereby final payment is based on the customers’ cheques being physically moved from one bank to another, the new system will facilitate the electronic capture and transmission of cheque images from bank to bank, with final payment now being based on images and not physical cheques. Live implementation of this project is expected to take place around the third quarter of 2014. The immediate result for customer will be the reduction of the clearing period from four to three days, with the prospect of further reductions in the clearing period as the project settles.

 

l FinScope market study

Bankers’ Association, along with other players in the financial sector, will be a key sponsor in an up-coming study which will be probing the aspect of financial access in the Botswana economy. As with the last FinScope study which was done in 2009, the results of this study will be useful to banks and other players in the private sector, regulators and policy makers. We believe this study will create a fresh platform for reforms in service provision in the market and also influence changes in policy.

BusinessWeek:  What is the outlook for the banking sector in 2014 and your goals this year?

Mabusa: As already mentioned, the banking sector is looking towards a challenging but exciting year for business.