Latest News

Athletics is, once more, expected to rescue a faltering Olympic Games ...
Fully vaccinated football fans could be allowed into stadiums when the...
There will be no love lost as Mares goalkeeper, Sedilame Boseja faces ...
Gaborone giants, Township Rollers are in the hunt for a sixth head coa...

ĹOver P19bn in banks to lend outĺ

Bank of Botswana (BoB) governor, Moses Pelaelo has played down reports of a looming liquidity crunch saying local commercial banks have about P19 billion available to lend out to customers.

Officially opening a Bank Gaborone branch in Maun yesterday, Pelaelo said the status and health of the banking system is sound.

“I can report that banks have sufficient liquidity, totalling approximately P19 billion, inclusive of Bank of Botswana Certificates and balances held abroad, both of which could be liquidated in case of need, with minimal capital loss, to finance any effective and viable demand for credit.  However, it should be noted that the distribution of liquidity amongst banks will vary from time to time,” he said.

A bank’s liquidity refers to its ability to meet all anticipated obligations such as funding loans or debt payments using available funds without having to liquidate other assets. Pelaelo’s comments come as analysts have pointed out an emerging trend of tightening liquidity in the banking system over the past years, which has largely been blamed on banks’ inability to grow their depositor base.

Analysts believe that there are increasing signs of strain in the banking system with some banks running out of funds to lend as tightening liquidity and a thin depositor base have pulled credit growth to a 20-year low. A recent market report compiled by economic consultancy firm, Econsult says the banking system seems to be under pressure from a number of fronts with both demand and supply factors constraining the industry. “Banking liquidity has been falling steadily for some time, but the decline has been particularly sharp since the beginning of 2017. Excess liquidity fell to 2.6% of banking assets in April, the lowest since the ‘liquidity crisis’ of late 2014.

“The liquidity squeeze has been driven by stagnant deposits. There has been no growth in the deposit base of banks for at least two years. With little surplus liquidity, it is

not surprising that bank lending has slowed.  The banks (or some of them at least) are simply running out of loanable funds,” reads the report.

In his remarks yesterday, Pelaelo also addressed an issue relating to the conduct of banks in accepting foreign currency denominated deposits amid reports that some local banks may have been used as conduits for money laundering activities by some depositors from neighbouring Zimbabwe.

According to the governor, Botswana’s banking and other laws permit non-residents to open accounts in local banks, but there is a legal requirement to declare any cross-border transfers, including cash in any currency equivalent to P10,000 and above.  “In opening accounts and accepting deposits by non-residents, the local banks are doing so in compliance with Botswana laws. 

Banks are, however, required to consistently undertake effective due diligence, including strict application of the Know Your Customer procedures for any such transactions and/or customers. Banks also need to ensure that any cross-border cash deposits and similar inward transfers are supported by duly completed and valid documents, when processing such transactions,” he said.

Local banks are also required to routinely monitor accounts for suspicious activity and file Suspicious Transactions Reports (STR) with the Financial Intelligence Agency.  While reporting suspicious transactions is not evident of illegality, Pelaelo said the report triggers appropriate steps, including follow up action by relevant authorities, such as the BoB, Non-Bank Financial Institutions Regulatory Authority and other law enforcement agencies.

“Having said that, I can confirm that both the Financial Intelligence Agency and the Bank of Botswana continue to monitor and enforce, in line with their respective mandate, local banks’ compliance with applicable laws, business conduct requirements, as well as the Anti-Money Laundering and Combatting the Financing of Terrorism protocols,” he added.




The Turnaround

Latest Frontpages

Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper
Adana Escort Ad─▒yaman Escort Afyon Escort A─čr─▒ Escort Aksaray Escort Amasya Escort Ankara Escort Antalya Escort Antep Escort Ardahan Escort Artvin Escort Ayd─▒n Escort Bal─▒kesir Escort Bart─▒n Escort Batman Escort Bayburt Escort Bilecik Escort Bing├Âl Escort Bitlis Escort Bolu Escort Burdur Escort Bursa Escort ├çanakkale Escort ├çank─▒r─▒ Escort ├çorum Escort Denizli Escort Diyarbak─▒r Escort D├╝zce Escort Edirne Escort Erzincan Escort Elaz─▒─č Escort Erzurum Escort Eski┼čehir Escort Giresun Escort G├╝m├╝┼čhane Escort Hakkari Escort Hatay Escort I─čd─▒r Escort Isparta Escort ─░skenderun Escort ─░stanbul Escort ─░zmir Escort ─░zmit Escort Karab├╝k Escort Karaman Escort Kars Escort Kastamonu Escort Kayseri Escort K─▒br─▒s Escort K─▒r─▒kkale Escort K─▒rklareli Escort K─▒r┼čehir Escort Kilis Escort Kocaeli Escort Konya Escort K├╝tahya Escort Malatya Escort Manisa Escort Mara┼č Escort Mardin Escort Mersin Escort Mu─čla Escort Mu┼č Escort Nev┼čehir Escort Ni─čde Escort Ordu Escort Osmaniye Escort Rize Escort Sakarya Escort Samsun Escort Siirt Escort Sinop Escort Sivas Escort ┼×─▒rnak Escort Tekirda─č Escort Tokat Escort Trabzon Escort Tunceli Escort Urfa Escort U┼čak Escort Van Escort Yalova Escort Yozgat Escort Zonguldak Escort Ala├žat─▒ Escort Alia─ča Escort Alsancak Escort Bornova Escort Buca Escort ├çe┼čme Escort ├çi─čli Escort Gaziemir Escort Kar┼č─▒yaka Escort fethiye escort iskenderun escort iskenderun escort iskenderun escort iskenderun escort iskenderun escort