BoB to stop all retail services

Brian Benza
Staff Writer | Friday September 23, 2011 00:00

The impending changes will compel members of the public to open bank accounts with commercial banks.

Government currently makes its payments by cheque that payees can either deposit into their bank accounts or cash over the counter at the Bank of Botswana. The latter has been preferred by most payees eager to avoid having to wait for at least three days for the cheque to be cleared.

However, with effect from October 1, government will make payments electronically. Only in special circumstances will cheques be issued through two commercial banks that government will have opened transacting accounts with.

The two banks are Barclays and Bank Gaborone. A spokesman of the Ministry of Finance says the cash withdrawals at the two commercial banks will be free of charge.

In a statement, government says prudent financial management and the need to be in line with international best practice influenced this decision. The statement reads:

'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 Fund Transfers (EFTs) and Real Time Gross Settlement (RTGS) for large payments.

'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.'

Transactions affected by the impending changes include salary advances, 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. Suppliers of goods and services to government will be paid by electronic means. However, all cheques drawn on BoB already issued by the Accountant General will continue to be encashed at BoB's Gaborone and Francistown banking halls until December 31, 2011.

Says Tshwaragano Mmereki, the Principal Public Relations Officer at the Ministry of Finance: 'When the decision was taken for the Bank of Botswana to cash government cheques at the Bank of Botswana, it was meant to assist employees and providers of goods and services with easy access to cash as there were only two operating commercial banks in the country at that time.

'Now, with the flourishing of new banks in the country, it is no longer necessary for the Bank of Botswana to provide such a service.

'Printing of such cheques was proving to be too costly for government. At the same time, government decided that the Central Bank is best effective if it just sticks to its regulatory and supervisory role and not be seen to be competing with the same banks.'