BoB takes over Kingdom bank

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The Bank of Botswana (BoB) on Friday took over management of troubled offshore bank, Kingdom Bank Africa Limited (KBAL).

The bank is reeling from liquidity constraints, which have seen depositors fail to withdraw their monies while workers haven’t received regular salaries for the past three months.

In a statement released on Friday, the central bank announced that they had assumed temporary management of KBAL “Customers of KBAL are informed that during the temporary management period, the operations of KBAL will only be restricted to receiving repayments of loans and advances made to customers.

“No deposits or withdrawals will be permitted during this period and KBAL cannot extend any new loans,” read the statement.

KBAL is an off-shore investment bank based in the Botswana Investment and Trade Centre (BITC), whose former parent bank, Afrasia Holdings Zimbabwe Limited and the current major shareholder, Brotherhood Holdings Limited, are Zimbabwe-based entities.

“Therefore, it has no depositors resident in Botswana. Accordingly, the temporary management is not envisaged to have any financial impact on domestic savers or on the domestic banking system as a whole,” added the statement.

According to the banking industry insiders in Botswana and Zimbabwe, KBAL liquidity and possible solvency matters largely stem from a shareholder dispute at its parent company in Harare, which resulted in the offshore bank losing  $17 million (P161 million) in near-cash financial instruments invested in a Zimbabwean parent bank.

Management of KBAL is reported to have, twice in the past three months, turned down suggestion by the central   bank for them to voluntarily surrender their banking licence. As an offshore bank under IFSC, KBAL’s clients benefit from tax-free, multi-currency offshore banking services.

Editor's Comment
What about employees in private sector?

How can this be achieved when there already is little care about the working conditions of those within the private sector employ?For a long time, private sector employees have been neglected by their employers, not because they cannot do better to care for them, but because they take advantage of government's laxity when it comes to protecting and advocating for public sector employees, giving the cue to employers within the private sector...

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