BANK OF BOTSWANA: SUBSIDIARY LEGISLATION

INDEX TO SUBSIDIARY LEGISLATION

Bank of Botswana (Bureaux de Change) Regulations

Bank of Botswana (Deposit Insurance Scheme) Regulations

Bank of Botswana (Exemption from Supervisory and Inspection Powers) Regulations

Bank of Botswana (Maintenance of Primary Reserves by Banks) Order

Electronic Payment Services Regulations

BANK OF BOTSWANA (BUREAUX de CHANGE) REGULATIONS

(section 73)

(24th September, 2004)

ARRANGEMENT OF REGULATIONS

REGULATION

1. Citation

2. Interpretation

3. Application for a licence

4. Licence to operate bureau de change

5. Conditions of licence

6. Transactions and dealings

7. Annual fee

8. Transfer of licence

9. Suspension of licence

10. Revocation of licence

11. Surrender of licence

12. Anti-money laundering measures

13. Transaction limits

14. Receipts of transactions

15. Register of transactions

16. Submission of returns

17. Financial year

18. Accounts and audit

19. Inspection by the Bank

20. Appeals

21. Display of licence

22. Body corporate liability

23. Offence and penalty

SCHEDULE

S.I. 84, 2004,
S.I. 32, 2007.

1. Citation

These Regulations may be cited as the Bank of Botswana (Bureau de Change) Regulations.

2. Interpretation

In these Regulations, unless the context otherwise requires—

“bureau de change” means a person licensed under section 30 of the Act to transact foreign exchange business;

“foreign currency” means a currency of a class which is considered legal tender in any country outside Botswana and includes reference to a right to receive foreign currency in respect of credit or balance at a bank; and

“foreign exchange business” means the selling and buying of foreign currency.

3. Application for a licence

A person who wishes to make an application for a licence to operate a bureau de change shall do so in Form 1 set out in the Schedule, and the application shall be accompanied by—

(a) an application fee of P2,000;

(b) an identity document of the applicant and two passport size photographs of the applicant, and where there is more than one applicant, an identity document and two passport size photographs of each applicant;

(i) has never been declared bankrupt or insolvent, and

(ii) has never been convicted within or outside Botswana, of a criminal offence involving fraud, money laundering or tax evasion;

(d) the curriculum vitae of each person who is going to be a principal officer, owner, partner or direct or of the bureau de change;

(e) a financial reference of the applicant’s bankers;

(f) a written consent by the applicant, authorising the Bank to verify information given under paragraph (e); and

(g) a copy of the Memorandum and Articles of Association by the applicant where the applicant is a company.

4. Licence to operate bureau de change

(1) The Bank shall, where it is satisfied that an application meets the requirements of regulation 3, issue, to the applicant, a licence to operate a bureau de change, in Form 2 set out in the Schedule.

(2) The Bank shall not issue a licence under subregulation (1) unless the applicant pays to the Bank a licence fee of P1,000.

(3) A bureau de change shall commence operation within six months of the issue of a licence under subregulation (1).

(4) A licence issued under subregulation (1) shall, unless previously renewed or revoked, expire at the end of a period of 12 months of the date of its issue.

(5) Where the Bank is not satisfied that the applicant meets the requirements of regulation 3, it shall reject the application and notify the applicant thereof, in writing, stating the reasons for the rejection.

5. Conditions of licence

(1) A bureau de change shall operate in accordance with these Regulations.

(2) Without prejudice to the generality of subregulation (1), a bureau de change shall—

(a) operate from premises approved by the Bank;

(b) not change the premises under paragraph (a) without the prior written approval of the Bank;

(d) not encumber in any way, the amount kept in accordance with subparagraph (c); and

(e) not effect any change in the composition of its shareholders or principal officers without the written approval of the Bank.

(3) A bureau de change that contravenes any provision of this regulation shall be guilty of an offence and shall be liable to a fine not exceeding P1,000.

6. Transactions and dealings

A bureau de change shall—

(a) buy and sell currency at freely negotiated rates with its customers and may issue bank drafts on an agency basis and shall indicate the principal as the issuing bank of the drafts;

(b) buy or sell on a spot basis, foreign currency involving cash, travellers cheques or bank drafts;

(d) set its hours of operation and shall remain open for business during the set hours;

(e) notify the Bank of any changes in the hours set under paragraph (d); and

(f) display in a conspicuous place on the licensed premises—

(i) the hours set under paragraph (d),

(ii) its buying and selling rate of the Pula against other currencies, and

(iii) commission charges if any.

7. Annual fee

(1) A bureau de change shall pay to the Bank, an annual licence fee of P4,000.

(2) Where a payment under subregulation (1) is made after a period not exceeding 12 months after the expiry of a licence, the Bank shall impose a penalty in accordance with subregulation (3).

(3) The penalty payable under subregulation (2) shall be a sum equal to one quarter of the annual licence fee multiplied by the number of periods of three months or less which have elapsed since the date on which the validity of the licence expired, calculated to the nearest Pula.

(4) An annual licence that expired 12 months or more prior to a payment under subregulation (1) shall be treated as an application for a new licence and the provisions of regulations 3 and 4 shall apply thereto.

8. Transfer of licence

A licence issued under these Regulations shall not be transferable.

9. Suspension of licence

(1) The Bank may suspend the licence of a bureau de change where the bureau de change has failed to conduct business in accordance with the Act or these Regulations.

(2) A suspension under this regulation shall be for such period as the Bank may determine to enable the bureau de change to take remedial action so as to comply with such requirements of the licence and the provisions of these Regulations as have not been complied with by the bureau de change.

10. Revocation of licence

(1) The Bank shall revoke the licence of a bureau de change where—

(a) the bureau de change has failed to take the remedial action referred to under regulation 9(2);

(b) the bureau de change has failed to pay a fine imposed under regulation 19(3)(b);

(d) the Bank is satisfied that the licence was issued based on an application that contained information that is misleading or on concealment of material facts;

(e) the owner of the bureau de change has been declared bankrupt or insolvent; or

(f) the bureau de change has surrendered its licence in accordance with regulation 11.

11. Surrender of licence

A bureau de change may surrender its licence to the Bank by giving the Bank 30 days notice, in writing, of its intention to voluntarily cease operations.

12. Anti-money laundering measures

(1) A bureau de change shall establish and maintain effective anti-money laundering measures.

(2) Without prejudice to the generality of subregulation (1), a bureau de change shall—

(a) take reasonable measures to obtain information about the true identity of the person on whose behalf a transaction with it is conducted;

(b) maintain, for at least 5 years, all records on transactions and submit them to the Bank for purposes of an inspection under regulation 19;

(d) comply with any guidelines issued by the Bank regarding—

(i) the identification of customers,

(ii) the keeping records of transactions,

(iii) the filing of suspicious transactions reports,

(v) the development of internal policies, procedures, controls and adequate screening when hiring employees, and

(vi) continuous employee training on anti money laundering measures.

13. Transaction limits

(1) A bureau de change may purchase or sell, per person per day, a cash amount not exceeding P10 000.

(2) Notwithstanding the generality of subregulation (1), a bureau de change may purchase or sell an amount in excess of P10 000 where the purchase or sale includes bank drafts, credit cards or travellers’ cheques.

(3) A bureau de change shall not allow a purchase or sale under subregulation (2) unless it is satisfied as to the identity of the customer and that the foreign currency emanates from an authorised bona fide and clearly identifiable source.

(4) The provisions of this regulation shall not apply where the bureau de change is dealing with a bank, hotel or another bureau de change.

(5) A bureau de change that contravenes a provision of this regulation shall be guilty of an offence and shall be liable to a fine not exceeding P1 000.

14. Receipts of transactions

(1) A bureau de change shall, for every—

(a) sale transaction, issue a receipt in Form 3 set out in the Schedule; and

(b) purchase transaction, issue a receipt in Form 4 set out in the Schedule.

(2) A bureau de change shall keep a duplicate copy of each receipt issued under subregulation (1) for purposes of an inspection under regulation 19.

15. Register of transactions

(1) A bureau de change shall maintain a register of the following transactions—

(a) cash;

(b) credit cards;

(d) bank drafts;

(e) sales and purchase; and

(f) daily summary and balance book.

(2) A register maintained under subregulation (1) shall be kept at the business premises of the bureau de change and shall be open for inspection under regulation 19.

(3) A bureau de change that contravenes a provision of this regulation shall be guilty of an offence and shall be liable to a fine not exceeding P1 000.

16. Submission of returns

(1) A bureau de change shall submit to the Bank, a monthly consolidated purchase and sales return in Form 5 set out in the Schedule.

(2) A return under subregulation (1) shall be submitted by the 15th day of the month following the month in which transactions took place.

(3) A bureau de change that contravenes a provision of this regulation shall be guilty of an offence and shall be liable to a fine not exceeding P1 000.

17. Financial year

The financial year of a bureau de change shall be a period of 12 months ending on the 31st of March of every year.

18. Accounts and audit

(1) A bureau de change shall keep and maintain proper books of accounts and records of accounts in respect of every financial year relating to the assets, liabilities, income and expenditure of the bureau de change, and shall prepare, in each financial year, a statement of such accounts.

(2) The accounts of a bureau de change in respect of each financial year shall, within three months of the end thereof, be audited by an auditor appointed by the bureau de change.

(3) An auditor appointed under subregulation (2) shall report in respect of the accounts for each financial year, in addition to any other matter on which the auditor considers it necessary to comment on, whether or not—

(a) the auditor has received all information and explanations which, to the best of the auditor’s knowledge and belief, were necessary for the performance of the auditor’s duties;

(b) the accounts and related records of a bureau de change have been properly kept;

(c) the statement of accounts prepared by a bureau de change was prepared on a basis consistent with that of the preceding year and represents a true and fair view of the transactions and financial affairs of the bureau de change.

(4) The report of the auditor and a copy of the audited accounts shall, within 14 days of the completion thereof, be forwarded to the bureau de change by the auditor.

(5) The bureau de change shall, within a period of three months of the end of the financial year or within such longer period as the Bank may approve, submit, to the Bank, the auditor’s report and the accounts audited under this regulation.

19. Inspection by the Bank

(1) The Bank may inspect premises from which a bureau de change is operated during the hours when such premises are open to the public, and may require a bureau de change to produce any book or document required to be kept under these Regulations.

(2) Where the bureau de change fails to produce any book or document referred to in subregulation (1), it shall be deemed to have contravened these Regulations.

(3) The Bank may, where it finds that a bureau de change has contravened a provision of these Regulations—

(a) caution the bureau de change in writing;

(b) impose such fine as it considers appropriate;

(d) revoke its licence in accordance with regulation 10.

20. Appeals

(1) A person aggrieved by the Bank’s decision—

(a) not to issue a licence;

(b) to impose a fine;

(d) to revoke a licence,

may appeal, in writing, to the Minister, within 21 days of the notification of that decision.

(2) Any appeal to the Minister made in terms of subregulation (1) shall be accompanied by an appeal fee of P5,000, and shall—

(a) clearly state the reasons for the appeal or the precise elements of the grievance, and

(b) state the remedy sought.

21. Display of licence

(1) A bureau de change shall exhibit, and keep exhibited, in a prominent place on the business premises, the licence and a sign board or name plate bearing, in legible letters, the name or style under which the bureau de change carries on business.

(2) A bureau de change that contravenes subregulation (1) shall be guilty of an offence and liable to a fine not exceeding P1,000.

22. Body corporate liability

Where an offence under these Regulations which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of a director, manager, secretary or other similar officer of the body corporate, or any other person who was purporting to act in such capacity, he, as well as the body corporate, shall be guilty of an offence and liable to a fine not exceeding P1,000.

23. Offence and penalty

(1) A person who—

(a) wilfully makes a false statement in any form or other document required to be kept under these Regulations;

(b) forges a licence;

(d) produces or uses a licence which is forged or which to his knowledge has been unlawfully altered;

(e) produces or uses a licence in the name of some other person or of a fictitious person;

(f) forges any document for the purposes of obtaining a licence;

(g) obtains a licence to enable another person, who would otherwise not qualify to obtain the licence, to obtain such a licence, or

(h) runs a business under a licence obtained under paragraph (g),

shall be guilty of an offence and shall be liable to a fine not exceeding P1,000 or to imprisonment for a term not exceeding six months, or to both.

(2) Subject to subregulation (3), where a manager, agent or servant of a bureau de change does or omits to do anything which, if done or omitted to be done by the bureau de change, would be in contravention of any of the provisions of these Regulations, the bureau de change shall be deemed to have contravened the provision and shall be liable to the penalties therefor.

(3) Subregulation (2) shall not apply where—

(a) the act or omission was done without the bureau de change’s knowledge, consent or connivance; and

(b) all reasonable steps were taken by the bureau de change to prevent the act or omission.

(4) Where the bureau de change issued instructions forbidding an act or omission, such action shall not of itself be sufficient proof of compliance with subregulation (3)(b).

SCHEDULE

FORM 1
APPLICATION FOR A LICENCE TO OPERATE A BUREAU de CHANGE

BANK OF BOTSWANA

(reg. 3)

To be completed in duplicate and in block letters, by the company/partnership/trust/person applying for a Bureau de Change licence and submitted in a sealed envelope to the Director, Banking Supervision Department, Bank of Botswana, P/Bag 154, Gaborone.

I, ……………………………………………………………………………….., acting as principal/promoter/in the capacity as duly authorised agent on behalf of the person(s) (delete as appropriate) whose particulars are hereunder, do hereby apply for a licence to establish a Bureau de Change in Botswana.

1. Full name of applicant (individual/company/partnership/trust)

………………………………………………………………………………………….

2. Nationality of applicant, identity number (in case of an individual) OR Certificate of Incorporation No. (in case of a company)

………………………………………………………………………………………….

3. Postal address of applicant ……………………………………………………….

4. Full residential address of applicant ……………………………………………

………………………………………………………………………………………….

5. Name of the bureau’s bank and branch in Botswana ………………………..

6. Name(s) of auditors and company secretaries (where applicable)

…………………………………………………………………………………………..

7. Number of branches the bureau de change intends to open and their locations

…………………………………………………………………………………………..

8. The application should also be accompanied by the following-

(i) the curriculum vitae of the principle officers, owners, partners and/or directors including the qualifications and experience (in the buying and selling of foreign currency) of the principal person, who would be responsible for the day-to-day operations of the business;

(ii) financial reference from the current bankers of the applicant, a separate written consent from the principal/applicant giving the Bank of Botswana permission to carry out an independent check on the financial propriety of the director, shareholders and the principal officer;

(iii) a certified copy of the beneficial owner(s)’ official identity documents, including 2 passport size photographs; and

(iv) full details or information pertaining to corporate affiliates to the proposed bureau de change business.

9. Full names, addresses and specimen signatures of directors/beneficial owners and number of shares held by each-

(a) …………………………………………………………………………………….

(b) …………………………………………………………………………………….

(d) …………………………………………………………………………………….

(e) …………………………………………………………………………………….

10. Location of proposed Bureau de Change

(a) District …………………………………………………………………………..

(b) City/ Town/Village …………………………………………………………….

(d) Postal address (if different from plot)……………………………………….

(e) Proposed trading name (to include words “Bureau de Change”)

……………………………………………………………………………………..

…………………………………………………………………………………….

(f) Proposed hours of business

…………………………………………………………………………………….

11. Declarations:

(a) I/We, the undersigned, hereby declare that the above statements and particulars are true and correct;

(b) I/We further declare that I/we have never been declared bankrupt and or convicted of a criminal offence involving fraud, money laundering, tax evasion or any other act(s) of dishonesty; and

(c) I/We if granted a licence to trade as a bureau de change, undertake to operate the bureau de change in accordance with the Act and these Regulations, and to comply with policy directives/notices as may be issued by the Bank of Botswana from time to time and accept obligations and duties imposed by the licence.

Signature ……………………………………. Date: …………………………………..

Designation/capacity

……………………………………………………………………………………………….

Name and address of witness

……………………………………………………………………………………………….

Signature of witness

……………………………………………………………………………………………….

FORM 2
BUREAU DE CHANGE LICENCE

BANK OF BOTSWANA

(Reg. 4(1))

BUREAU DE CHANGE LICENCE

Licence No. …………………………

THIS IS TO CERTIFY THAT

Is hereby licensed to operate as a bureau de change under Section 30 of the Bank of Botswana Act (Cap. 55:01), subject to compliance with the provisions of all applicable laws and regulations and such other policies and directives as may be issued from time to time by the Bank of Botswana.

Signed at …………………this …………………day of …………………20……

………………………………………………………………
Director, Banking Supervision Department.

FORM 3
SALE TRANSACTION RECEIPT

BANK OF BOTSWANA

(reg. 14(1)(a))

Name and address of the Bureau de Change	……………………………………………………………………..
Date	……………………………………………………………………..
Time	……………………………………………………………………..

Cheque type Thomas Cook/visa etc.	Currency	Amount	Rate	Pula equivalent

Particulars of buyer:
Name……………………………………………………………………………………………………
Postal and residential address in Botswana
…………………………………………………………………………………………………………..
Nationality …………………………………………………………………………………………….
ID/Passport No ………………………………………………………………………………………
………………………………… Signature of Operator	…………………………………. Signature of Customer
Non-residents are advised to keep this receipt safely, to be produced whenever required by appropriate authority(ies) in Botswana.
NB: This receipt should be produced in duplicate

FORM 4
PURCHASE TRANSACTION RECEIPT

BANK OF BOTSWANA

(reg. 14(1)(b))

Name and address of the Bureau de Change

……………………………………………………………………

Date

……………………………………………………………………

Time

……………………………………………………………………

Cheque type Thomas Cook/ visa etc.	Currency	Amount	Rate	Pula equivalent

Particulars of seller:
Name …………………………………………………………………………………………………..
Postal and residential address in Botswana …………………………………………………..
…………………………………………………………………………………………………………..
Nationality …………………………………………..ID/Passport No……………………………
………………………………….. Signature of Operator	…………………………………… Signature of Customer
Non-residents are advised to keep this receipt safely, to be produced whenever required by appropriate authority(ies) in Botswana.
NB: This receipt should be produced in duplicate

FORM 5
MONTHLY RETURN FOR BUREAUX de CHANGE

BANK OF BOTSWANA

(reg. 16(1))

Month …………. Day………….. Year ………….

Name and physical address of the Bureau de Change

…………………………………………………………

………………………………………………………..

SCHEDULE 1
PURCHASES

Part A
(Valid for transactions with the public other than banks and other bureaux de change)

Currency	Travellers cheques or drafts/IMO/credit card	Pula equivalent	Cash	Total in Pula
			Foreign currency	Pula equivalent

US dollar
Pound Sterling
South African Rand
Euro
Other (specify)


Sub-total in Pula

Part B
(Valid for transactions with banks)

Currency	Travellers cheques or drafts/IMO/credit card	Pula equivalent	Cash	Total in Pula
			Foreign currency	Pula equivalent

US dollar
Pound Sterling
South African Rand
Euro
Other (specify)


Sub-total in Pula

Part C
(Valid for transactions with other bureaux de change)

Currency	Travellers cheques or drafts/IMO/credit card	Pula equivalent	Cash	Total in Pula
			Foreign currency	Pula equivalent

US dollar
Pound Sterling
South African Rand
Euro
Other (specify)


Sub-total in Pula

Part D
Total (Part A, B and C) foreign exchange purchases (pula equivalent)

PUBLIC

BANKS

BUREAUX

TOTAL

Part E
Average buying exchange rate during the reporting month

	Traveller’s cheques/drafts/IMO/credit card	Cash
US dollar
Pound Sterling
South African Rand
Euro
Other (specify)

SCHEDULE 2
SALES

Part A
(Valid for transactions with the public other than banks and other bureaux de change)

Currency	Travellers cheques or drafts/IMO/credit card	Pula equivalent	Cash	Total in Pula
			Foreign currency	Pula equivalent

US dollar
Pound Sterling
South African Rand
Euro
Other (specify)


Sub-total in Pula

Part B
(Valid for transactions with banks)

Currency	Travellers cheques or drafts/IMO/credit card	Pula equivalent	Cash	Total in Pula
			Foreign currency	Pula equivalent

US dollar
Pound Sterling
South African Rand
Euro
Other (specify)


Sub-total in Pula

Part C
(Valid for transactions with other bureaux de change

Currency	Travellers cheques or drafts/IMO/credit card	Pula equivalent	Cash	Total in Pula
			Foreign currency	Pula equivalent

US dollar
Pound Sterling
South African Rand
Euro
Other (specify)


Sub-total in Pula

Part D
Total (Part A, B and C) foreign exchange sales (pula equivalent)

PUBLIC	BANKS	BUREAUX	TOTAL

Part E
Average selling exchange rate during the reporting month

	Traveller’s cheques/drafts/IMO/credit card	Cash
US dollar
Pound Sterling
South African Rand
Euro
Other (specify)

BANK OF BOTSWANA (EXEMPTION FROM SUPERVISORY AND INSPECTION POWERS) REGULATIONS

(section 46)

(24th December, 2010)

ARRANGEMENT OF REGULATIONS

REGULATION

1. Citation

2. Exemption from supervisory and inspection powers

3. Specification of applicable enactment

S.I. 23, 2009,
S.I. 125, 2010.

1. Citation

These Regulations may be cited as the Bank of Botswana (Exemption from Supervisory and Inspection Powers) Regulations.

2. Exemption from supervisory and inspection powers

The non-bank non-financial institutions accredited to the International Financial Services Centre are exempted from the supervision and inspection provisions of the Bank of Botswana Act (Cap. 55:01).

3. Specification of applicable enactment

The Companies Act is hereby specified as the applicable enactment for the supervision of non-bank non-financial institutions accredited to the International Financial Services Centre and registered under the Companies Act (Cap. 42:01).

ELECTRONIC PAYMENT SERVICES REGULATIONS

ARRANGEMENT OF REGULATIONS

REGULATION

PART I
Preliminary

1. Citation

2. Interpretation

3. Application

PART II
Licensing of Electronic Payment Service Providers

4. Application for licence

5. Licence criteria

6. Additional applications for principal officer and managers

7. Licence to operate electronic payment service

8. Conditions of licence

9. Suspension of licence

10. Revocation of licence

11. Surrender of licence

12. Licensee register

13. Annual fee

14. Approval of changes

PART III
General Provisions Relating to Administration of Licensees

15. Governance

16. Technological infrastructure

17. Internal controls

18. Operational arrangements

19. Risk management

20. Capital requirements

21. Safeguarding of funds

22. Dedicated cash account

23. Liquidity requirements

24. Accounts and audit

25. Keeping of records

PART IV
Electronic Payment Transactions

26. Issuance of electronic money

27. Execution of payments

28. Transaction limits

29. Dormant accounts

PART V
Outsourcing of Electronic Payment Services

30. Outsourcing

31. Appointment of agent

32. Duties of agents

PART VI
Miscellaneous Provisions

33. Confidentiality of information

34. Co-operation

35. Access to information by Bank

36. Offences and penalties

37. Transitional provisions

S.I. 2, 2019.

PART I
Preliminary

1. Citation

These Regulations may be cited as the Electronic Payment Services Regulations.

2. Interpretation

In these Regulations unless the context otherwise requires—

“agent” means an entity appointed by an electronic payment service provider to perform certain services on its behalf;

“arms of war” has the same meaning assigned to it under the Arms and Ammunition Act (Cap. 24:01):

“commercial bank” means a bank in terms of the Banking Act (Cap. 46:04);

“customer” means a consumer or an electronic payment money holder;

“dedicated cash account” means an account opened with a commercial bank where an electronic payment service provider issues electronic money corresponding to monetary value;

“electronic money” means the electronically stored monetary value;

“electronic payment service” means—

(a) a service consisting of issuance of electronic money;

(b) a service enabling electronic money to be placed on a payment account;

(i) direct debits,

(ii) payments through a payment card,

(iii) credit transfers and standing orders,

(iv) issuing of payment instruments, and

(v) money or remittance transfer;

“financial offence” has the same meaning assigned to it under the Financial Intelligence Act (Cap. 08:07);

“licensee” means a company that is licensed to operate an electronic payment service under these Regulations;

“NBC weapon” has the same meaning assigned to under the Financial Intelligence Act (Cap. 08:07);

“principal officer” means a person responsible for the daily management of the principal office of an electronic payment services provider; and

“significant shareholder” means a person other than the government or a public entity that owns directly or indirectly alone or in concert with another person, an interest that represents 10 per cent or more of the shares of an electronic payment service operator.

3. Application

(1) These Regulations shall apply to—

(a) a person who wishes to operate an electronic payment service; and

(b) an electronic payment service operator whose place of business is in Botswana.

(2) Part III of these Regulations shall not apply to commercial banks when providing electronic payment services.

(3) These Regulations shall not apply to—

(a) limited services based on specific payment instruments that meet the following conditions—

(i) instruments allowing the holder to acquire goods or services in the premises of the issuer,

(ii) instruments within a limited network of service providers under direct commercial agreement with the issuer, or

(iii) instruments which can be used to acquire a very limited range of goods or services;

(b) payment transactions made exclusively in cash directly from the payer to the payee without intervention;

(d) technical support services for the provision of payment services, without the service providers entering into possession of funds to be transferred during the services;

(e) payment transactions carried out between payment service providers, their agents or branches for their own account; and

(f) payment transactions carried out within a payment or securities settlement system.

PART II
Licensing of Electronic Payment Service Providers

4. Application for licence

(1) A person shall not operate an electronic payment service unless the person has been issued with a licence in accordance with these Regulations.

(2) A person who wishes to operate an electronic payment service shall make an application to the Bank in Form A set out in Schedule 1.

(3) An application under subregulation (2) shall be accompanied by—

(a) the fee set out in Schedule 2;

(b) information of significant shareholders, proposed directors and principal officer in Form B set out in Schedule 1;

(d) a detailed business plan for the provision of electronic payments indicating—

(i) a programme of operations specifying the type of electronic payment service to be provided,

(ii) the geographical areas to be covered,

(iii) five years’ financial projections demonstrating appropriate and proportionate systems resources and procedures for sound operation, and

(iv) process flows and settlement arrangements which shall include—

(aa) processes for creation, allocation and de-allocation of electronic money, and

(bb) defined roles and responsibilities of the personnel in charge of the processes;

(e) description of the applicant’s governance arrangements and internal control mechanisms, including—

(i) sound administrative procedures,

(ii) risk-management procedures, and

(iii) accounting and auditing procedures,

that are comprehensive and proportionate to the nature, scale and complexity of the payment services to be provided;

(f) the internal control mechanism that the applicant has established to comply with its obligations in relation to anti-money laundering and combating terrorist financing and financing of the proliferation of arms of war or NBC weapons; and

(g) a description of main characteristics and key risks.

(4) The Bank may, when considering an application under subregulation (1), require an applicant to submit any additional information as it may require.

(5) Where the Bank has required additional information, the applicant, principal officer, director or manager shall provide such information within 28 days.

(6) A person who contravenes subregulation (1) shall be guilty of an offence and shall be liable to a fine not exceeding P5 000.

5. Licence criteria

(1) A licensee shall operate in accordance with these Regulations.

(2) Without prejudice to the generality of subregulation (1) an applicant shall satisfy the Bank that—

(a) the applicant has the ability to provide electronic payment services in a safe, secure and sound manner;

(b) where the applicant is engaged in other licensed commercial activities, there is no potential of the other commercial activities impairing or otherwise affecting—

(i) the safety, security or financial soundness of electronic payment services, or

(ii) the ability of the Bank to monitor compliance of the electronic payment services provider in accordance with these Regulations;

(c) the applicant meets the minimum capital requirements set out in Schedule 2 and will provide additional capital as may be required; and

(d) the applicant has sound prudent conduct and management of its affairs and that, it has—

(i) corporate governance arrangements with well-defined lines of accountability, including—

(aa) clearly defined and documented organisational arrangements for ownership and management structure, and

(bb) segregation of duties and internal control arrangements to mitigate against risk of mismanagement and fraud,

(ii) a risk management framework to identify, measure, monitor, manage and report any risks to which it might be exposed,

(iii) internal controls mechanisms,

(iv) directors and employed persons who are fit and proper as prescribed in the Banking Act, and

(v) adequate measures to safeguard customers.

6. Additional applications for principal officer and managers

(1) A licensee shall not appoint a principal officer, director or manager for the operation of electronic payment services without the approval of the Bank.

(2) A licensee who wishes to appoint a principal officer, director or manager shall make an application in Form B set out in Schedule 1.

(3) An application in accordance with subregulation (2) shall be accompanied by a completed questionnaire in Form C set out in Schedule 1.

(4) The Bank shall, if it is satisfied that the person in subsection (1) and (2) meets the requirements under these Regulations, give approval for the person to be appointed in terms of this section.

(5) A licensee who contravenes subregulation (1) shall be guilty of an offence and shall be liable to a fine not exceeding P 5 000.

7. Licence to operate electronic payment service

(1) The Bank shall if satisfied that the applicant meets the requirements within three months of receiving an application, issue the applicant with a licence to operate an electronic payment service in Form D set out in Schedule 1.

(2) The Bank shall require the applicant to establish a separate legal entity to carry on the provision of electronic payment services where—

(a) an applicant already carries on other business activities other than the provision of electronic payment services; and

(b) the Bank considers that the carrying on of such other business activities will impair or is likely to impair the—

(i) financial soundness of the applicant, or

(ii) Bank’s effective supervision of the applicant.

(3) The Bank may, where additional information is not supplied in accordance with subregulation (1), reject the application.

(4) The Bank shall reject an application for a licence where—

(a) the applicant or any significant owners has been convicted of a financial offence in any jurisdiction during the preceding 10 years or is convicted of a crime which carries a sentence of imprisonment exceeding two years;

(b) the application contains incomplete, false or misleading information;

(c) the applicant fails to respond to the initial request from the Bank for additional information within 28 days of the request;

(d) the applicant intends to operate under a name which—

(i) resembles an existing bank or entity which may deceive the public,

(ii) suggests a false connection with a person or authority, or

(iii) falsely suggests a special status in relation to the Government or any public body or that the applicant enjoys official support or patronage.

(5) Where the Bank rejects an application, it shall notify the applicant in writing and give reasons for the rejection.

(6) The Bank may impose such conditions to the licence as it considers necessary.

(7) An aggrieved applicant whose application has been rejected may within 30 calendar days from the date on which the rejection was communicated, appeal against the decision to the Minister.

8. Conditions of licence

(1) A licence issued under these Regulations shall not be transferable.

(2) A licensee shall only undertake the business specified in the conditions of a licence.

(3) The Bank may impose any other conditions it considers necessary to issue the licence.

9. Suspension of licence

The Bank may suspend a licence for a period not exceeding 12 months where the licensee has failed to conduct business in accordance with the Act or these Regulations, to enable the licensee to take remedial action so as to comply with the requirements of the licence and the provisions of these Regulations.

10. Revocation of licence

(1) The Bank shall revoke the licence where—

(a) the licensee has failed to commence business within 12 months from the date the licence is issued;

(b) the licensee ceases to engage in business for more than six consecutive months;

(c) the Bank is satisfied that the licence was issued based on an application that contained information that is misleading or on concealment of material facts;

(d) the licensee has failed to take the remedial action referred to under regulation 9;

(e) the licensee has failed to pay the annual licence fee in accordance with regulation 13;

(f) the licensee conducts business which constitutes a threat to the security or in a manner that affects the stability of a payment system;

(g) the licensee has failed to comply with these Regulations;

(h) the licensee fails to comply with the Financial Intelligence Act; or

(i) the licensee has surrendered its licence in accordance with regulation 11(1).

(2) Where the Bank suspends or revokes a licence, the Bank shall—

(a) immediately notify the public of the suspension or revocation by Notice in the Gazette and at least two newspapers of wide national circulation;

(b) order that operations cease immediately and that any further dealings with the licensee shall be for the purpose of corrective action;

(c) notify the commercial bank holding the funds in the dedicated cash account to cease forthwith further dealings with the funds until it receives directions from the Bank;

(d) notify other relevant regulatory authorities; and

(e) amend the register accordingly.

(3) Where a licence has been revoked, a licensee shall—

(a) immediately cease electronic payment services or any other activity allowed by these Regulations; and

(b) surrender its licence to the Bank within seven days.

11. Surrender of licence

(1) A licensee may surrender the licence to the Bank by giving the Bank 30 days’ notice, in writing, of its intention to voluntarily cease operations.

(2) Where a licensee surrenders the licence in terms of this regulation the licensee shall—

(a) notify its customers two months prior to the surrender to allow customers to retrieve their funds;

(b) handover the entire database in readable format and other relevant information to the Bank to facilitate the processing of payments to customers; and

(3) The Bank may appoint any person, including another electronic payment services provider to distribute the funds in subregulation (2)(b).

12. Licensee register

(1) The Bank shall keep and maintain a register of electronic payment services providers.

(2) The register shall specify the—

(a) address of the head office of the licensee;

(b) address and the name of its agents and branches if any; and

(3) The register shall be accessible to the public.

13. Annual fee

(1) A licensee shall pay to the Bank, an annual licence fee set out in Schedule 2.

(2) Where a payment under subregulation (1) is not made within a period of 12 months after it became due, the Bank shall revoke the licence.

14. Approval of changes

(1) A licensee shall seek prior authorisation from the Bank to introduce a substantial change or enhancement in its services or in its structure, organisation and functioning of the organisation.

(2) For purposes of this section—

“substantial change or enhancement in services” refers to a change or enhancement which expands the scope or nature of the services of the licensee and may include—

(a) additional functionality of its service;

(b) accessing new electronic channels;

(d) any changes to the documentation and information provided during the application process; and

“substantial change or enhancement in structure, organisation and functioning” includes—

(a) change in the commercial name, identity of shareholders and directors;

(b) any other important changes to the documentation and information provided during the application process; or

PART III
General Provisions Relating to Administration of Licensees

15. Governance

(1) A licensee shall establish effective, transparent and adequate governance arrangements to ensure continued integrity of its service.

(2) The governance arrangements shall include the keeping of electronic payment services as a separate business unit from the other business units of the licensee including—

(a) maintaining a separate management structure; and

(b) keeping separate books of accounts for its payment services.

16. Technological infrastructure

(1) A licensee shall ensure that the business has the necessary electronic payment services technological resources to conduct the business.

(2) For purposes of subregulation (1) the resources shall—

(a) be appropriate and tested technology systems with fraud monitoring tools;

(b) have valid third party certification from a certification authority or body on compliance status; and

(3) A licensee shall effect and settle customer funds and agent based electronic payment service transactions electronically and in real time against a preloaded account held by an agent.

(4) All transactions against customer accounts shall be authorised by the account holder.

(5) A licensee shall make settlement against pre-funded accounts weekly.

17. Internal controls

(1) A licensee shall ensure that the business has the necessary internal controls to conduct the electronic payment service business.

(2) A licensee shall ensure that the following minimum system and controls are in place—

(a) sound and prudent management, administrative and accounting procedures;

(b) updated internal controls;

(c) appropriate security policies and measures intended to safeguard the integrity, authenticity, confidentiality of data and operating systems;

(d) backup infrastructure;

(e) business continuity and disaster recovery plan; and

(f) an effective audit function to provide an annual review of security control environment and critical systems.

(3) A licensee shall test the effectiveness of the backup infrastructure and business continuity plan quarterly.

(4) A licensee shall ensure that a system maintains a complete audit log of all user activity.

(5) A licensee shall put in place systems that have built-in control mechanisms for a complete audit trail which include—

(a) complete records of opened electronic money accounts;

(b) records of identification for each customer;

(d) internal policies, procedures and accountability structures for anti-money laundering and counter-financing of terrorism or counter-financing of proliferation of arms of war or NBC weapon;

(e) automatic alerts and flags on suspicious transactions; and

(f) detection of irregular patterns of transactions.

(6) A licensee shall grant the Bank or its authorised agent access to connect to the system of a business licensed under these Regulations for purposes of monitoring.

18. Operational arrangements

(1) A licensee shall ensure that the business has adequate operational arrangements to conduct the electronic payment service business.

(2) A licensee shall ensure that the following operational arrangements are in place—

(a) rules, policies, procedures and agreements setting out the rights, responsibilities and liabilities of the licensee, third parties, agents, customers and any relevant stakeholder engaged in outsourcing arrangements including—

(i) adequate training and support of agents, and provision of an agent manual containing policies, rules, and operational guidelines needed to ensure the safe and efficient provision of services to customers,

(ii) monitoring of activities carried out by agents, and

(iii) maintaining records of the number, volume and values of transactions carried out by each agent;

(b) measures to ensure prudent management of funds collected from users, including measures to ensure that such funds are available at all times for repayment to users;

(d) the maintenance of separate, accurate and complete records and accounts for all its business activities; and

(e) detailed terms and conditions for use of electronic payment services, which should be easily accessible and understood.

19. Risk management

(1) A licensee shall establish and maintain a risk management framework to mitigate risk and to ensure the safety and integrity of electronic transactions.

(2) A licensee shall ensure that a risk management framework—

(a) can identify the range of risks associated with the provision of critical operations and services;

(b) include comprehensive risk management policies, procedures and systems to identify, measure and monitor the range of risks on an on-going basis;

(d) include liquidity management plans;

(e) include capital management plans; and

(f) include a comprehensive internal audit functions.

(3) A licensee shall comply with—

(a) the technical standards as may be issued by the Bank from time to time; and

(b) other international standards or risk management guidelines which may be made applicable to it by the Bank.

20. Capital requirements

A licensee shall at all times maintain a minimum paid up capital as set out in Schedule 2.

21. Safeguarding of funds

(1) A licensee shall safeguard funds which have been received through electronic payment services by—

(a) not combining the funds received from customers for electronic payment services with the funds of any other payment service;

(b) ensuring that the funds in the dedicated cash account are not mixed with the funds of any person other than the licensee’s funds;

(c) ensuring that the dedicated cash account is held either in an individual or pooled account with one or more commercial banks in Botswana;

(d) for electronic money issuance, ensuring that the funds received from the customers and exchanged for electronic money are deposited in a dedicated cash account opened in a commercial bank in Botswana and held for the sole purpose of safeguarding the relevant funds at least five business days after the date on which the electronic money has been issued;

(e) ensuring that balances in the dedicated cash account are not at any time less than what is owed to customers;

(f) ensuring that the account has records of all customers under the licensee;

(g) ensuring that the dedicated cash account is protected from risks that may occasion loss to beneficiaries of the funds; and

(h) complying with any other requirements.

(2) A licensee shall enter into an agreement with a commercial bank which—

(a) makes provision for the operations of the dedicated cash account and the safeguarding of funds for the benefit for customers;

(b) provides that the sum of the dedicated cash account held in the commercial bank shall not exceed 20 per cent net worth of the commercial bank;

(c) indicates that when the threshold in paragraph (b) has exceeded the prescribed limit, the excess funds shall be placed in another commercial bank;

(d) requires the commercial bank to immediately notify the licensee when the threshold is exceeded;

(e) provides that any interest earned or accrued on the dedicated cash account shall be used by a licensee for account maintenance or social responsibility to promote financial inclusion; and

(f) shall be submitted to the Bank for approval.

22. Dedicated cash account

(1) A licensee shall open an interest bearing settlement account in its name with a commercial bank.

(2) The commercial bank shall credit interest earned to a separate account for the licensee to be used for—

(a) account maintenance; or

(b) social responsibility to promote financial inclusion,

subject to the prior approval of the Bank.

(3) The commercial bank shall—

(a) monitor all transactions made in the dedicated cash account and report to the Bank monthly;

(b) monitor—

(i) settlement of transactions with external systems,

(ii) inflows and redemptions by customers,

(iii) suspicious transactions, and

(iv) exceeded thresholds and limits;

(c) provide the licensee with the ability to electronically extract transaction information on a dedicated cash account and request for reports;

(d) report the funds held in the dedicated cash account as part of the deposit liabilities of the commercial bank monthly.

(4) A licensee shall ensure that—

(a) at any time, funds held in the dedicated cash account are equal to the outstanding issued electronic money;

(b) the dedicated cash account is reconciled on a daily basis; and

(c) the transactions to the dedicated cash account are made only to effect changes in the cumulative sum of customer account balances.

(5) A licensee shall ensure that funds in the dedicated cash account are limited to transactions for—

(a) settlement obligations arising from customer transactions and other settlement transactions by way of other payment systems; or

(b) withdrawal of funds by a customer.

(6) A licensee shall not use funds in the dedicated cash account as security or collateral.

(7) Where a licensee is insolvent, the—

(a) claims of the customers shall be paid from the dedicated cash account in priority to all creditors; and

(b) commercial bank where the dedicated cash account is held shall have no claim to the funds in the dedicated cash account.

(8) A licensee shall within 10 days of the end of every month submit to the Bank, the following information—

(a) the volume and value of the electronic payment services offered including over the counter transactions;

(b) the number of registered and active electronic money accounts issued by the electronic money issuers, stating the type of account level, with activity counted on a 90 day basis;

(c) the number and types of registered and active agents in its network, including sub-agents not directly under contract with activity counted on a 30 day basis;

(d) the aggregate value of pooled float or dedicated cash amount used in the money business held with commercial banks;

(e) the total sum of outstanding electronic money balances as at end of each month;

(f) monthly reconciliation statements of the aggregate value of balances held in the dedicated cash account against balances held in the electronic money accounts;

(g) number and value of all dormant accounts;

(h) balances in the unclaimed dormant account funds;

(i) person to person payments (P2P), person to business payments (P2B), business to person payments (B2P) and business to business payments (B2B) value and volumes;

(j) non electronic payment services such as airtime purchase;

(k) bank to e-wallet and e-wallet to bank account;

(l) agent cash transactions;

(m) dedicated cash account interest balances;

(n) dedicated cash account balance inquiry/statement;

(o) fees collected;

(p) incidents of fraud, cybercrime, theft or robbery, including at its agents and amount involved;

(q) number of complaints received, broken down by category and agent location, including remedial measures taken, those resolved in favour of customers or not and those outstanding with valid reasons;

(r) number and type of material service interruptions and significant security breaches;

(s) number of system outages that result in the inability of the customer to access e-wallet lasting more than two hours; and

(t) such other information as may be required by the Bank from time to time.

23. Liquidity requirements

(1) A licensee shall keep 100 per cent of the electronic money float in the form of cash balances held at commercial banks in Botswana.

(2) Commercial banks regulated by the Banking Act shall not be subject to subregulation (1) but shall include electronic money balances in the calculation of their statutory reserve requirement and liquidity assets requirement.

(3) A licensee shall on a daily basis, no later than 4:00 pm reconcile the liquid assets held for redemption of electronic money with the electronic money value held by the customers, agents and merchants.

(4) A licensee shall where there are deficiencies in the amount of liquid assets in terms of subregulation (3) rectify the deficiencies by 12:00 pm the following day.

(5) A licensee shall keep records as well as reconciliations of the liquid assets in terms of this regulation and shall make them available to the Bank for inspection at any time.

24. Accounts and audit

(1) A licensee shall keep and maintain proper books of accounts in respect of every financial year relating to the assets, liabilities, income and expenditure of the business and shall prepare in each financial year, a statement of such accounts.

(2) A licensee shall appoint, at its own expense an external auditor who is a member of Botswana Institute of Chartered Accountants to audit the books of accounts for each financial year.

(3) An external auditor appointed shall report in respect of the accounts for each financial year, in addition to any other matter on which the auditor considers it necessary to comment on, whether or not the—

(a) external auditor received all the information and explanations which, to the best of the auditor’s knowledge and belief, were necessary for the performance of the auditor’s duties;

(b) accounts and related records of the licensee have been properly kept;

(c) the licensee has complied with all financial provisions of these Regulations with which it is its duty to comply; and

(d) statement of accounts prepared by the licensee was consistent with that of the preceding year and represents a true and fair view of the transactions and financial affairs of the licensee.

(4) A licensee shall within three months of the end of each financial year submit audited books to the Bank.

(5) The Bank may require an external auditor to—

(a) submit to the Bank such information or reports as the Bank may require in relation to the audit; and

(b) carry out any examination or establish any procedure.

(6) Where a licensee stops an external auditor from executing the work assigned, the licensee and the auditor shall inform the Bank and the Bank may request an explanation, if any, from the licensee and the auditor.

25. Keeping of records

(1) A licensee shall keep records of transactions and records of copies of identification documents presented by customers for a period of at least five years from the date a transaction is concluded and after the termination of the business relationship.

(2) A licensee shall keep records of—

(a) identification, contact and address of each customer;

(b) the name, physical address, postal address, email address and telephone number of the agents;

(c) physical address and telephone numbers of each of the outlets of the agents where electronic payments services are provided;

(d) the identity of the directors and persons responsible for the management of the agent; and

(e) a register of agents including those whose services have been suspended or terminated and the reasons for such suspension or termination.

(2) A licensee shall keep records under this regulation by way of original copies, either in hard copies or electronically.

(3) The Bank may inspect premises from which a licensee is operating during working hours when such premises are open to the public and may require a licensee to produce any book or document required to be kept under these Regulations.

(4) Where a licensee fails to produce any book or document referred to in subregulation (1), the Bank may suspend its licence.

PART IV
Electronic Payment Transactions

26. Issuance of electronic money

(1) Electronic money accounts and transactions shall be denominated in Botswana Pula.

(2) A licensee shall issue electronic money at par value on the receipt of monetary value.

(3) A licensee shall upon request of a customer redeem the monetary value of the electronic money.

(4) A licensee may charge a redemption fee which shall be proportionate and commensurate with the actual cost incurred by the licensee; and approved by the Bank.

(5) A licensee shall not—

(a) offer interest or any other benefit related to the duration of the balance of the electronic money remaining in the customer’s account;

(b) engage in any lending or investment activity on the dedicated cash account;

(d) present or market electronic money as deposit.

(6) A licensee shall provide the customer with—

(a) a reference enabling the customer to identify each transaction;

(b) transaction amount;

(d) date and time of transaction;

(e) fee, if any; and

(f) electronic money balance.

(7) A licensee shall upon request by a customer make available in writing the remaining balance of the customer.

(8) A licensee shall not charge a customer for making information available to the customer under these Regulations.

27. Execution of payments

(1) A licensee shall execute all electronic payment transactions in real time.

(2) A customer may not revoke an electronic payment once it has been received by a licensee.

(3) A licensee shall transfer the full amount of the electronic payment transaction.

(4) A licensee shall not deduct charges from the amount transferred in subregulation (3) unless—

(a) expressly agreed to by the customer in advance; or

(b) the customer received prior notice.

(5) A licensee shall where it is liable for non-execution or defective execution of an electronic payment transaction, immediately restore customer’s account, including a refund of charges imposed.

(6) A licensee shall be liable for payment of transactions performed without the knowledge of the customer.

28. Transaction limits

(1) A licensee shall transact within the limits set out in Schedule 3.

(2) The aggregate balance and transaction across electronic money accounts shall not exceed the limits stipulated for the account type.

29. Dormant accounts

(1) An account that has not registered a transactional activity for a period of 12 months shall be a dormant account.

(2) A licensee shall notify a customer not less than one month before the lapse of the 12 month’s limit that the account will be blocked unless there is transactional activity.

(3) A licensee shall block a dormant account and—

(a) notify the customer that the account is blocked; and

(b) provide instructions on how they can reactivate the account.

(4) A licensee may reactivate a dormant account where a customer makes a request for re-activation.

(5) A licensee shall transfer all funds held in dormant accounts to a separate account with a commercial bank to be kept for a period of not less than three years.

(6) A licensee shall where funds in a dormant account remain unclaimed by the customer in terms of subregulation (4), transfer such funds and contact information of the customer to the Abandoned Funds Account with the Bank.

(7) In the case of mobile money, outstanding electronic money balances may be dissociated from the Mobile Station International Directory Numbers after 90 calendar days of inactivity.

(8) A Mobile Station International Directory Number that is linked to an electronic money account shall be reassigned to a new customer only when the electronic money account is being terminated.

PART V
Outsourcing of Electronic Payment Services

30. Outsourcing

(1) A licensee may enter into an agreement with a third party to outsource its operational functions for electronic payment services including—

(a) technology platform;

(b) recruitment and registration of customers;

(d) management of agents, such as monitoring, branding or liquidity management;

(e) sales and marketing; and

(f) provision and maintenance of equipment.

(2) Where a licensee intends to outsource any operational function, the licensee shall—

(a) ensure that outsourcing will not impair—

(i) the quality of internal control of the licensee; and

(ii) the ability of the Bank to monitor the compliance of the licensee with these Regulations;

(b) be liable for anything done or omitted by the third party;

(d) notify the Bank 30 days before an outsourcing agreement is implemented.

31. Appointment of agent

(1) A licensee shall one month before appointing a new agent apply to the Bank to have an agent registered in the register.

(2) A licensee shall subject to subregulation (1) submit to the Bank the following information—

(a) the criteria for appointing agents;

(b) the geographical location of the agents;

(d) an internal controls audit report for the electronic payment services;

(e) a risk assessment report for the electronic payment services;

(f) security measures plan for the agent’s premises;

(g) revenue sharing structure for the agent and agent fee;

(h) agency manual and any materials used for training; and

(i) such other information as the Bank may require.

(3) A licensee shall submit to the Bank a copy of the proposed agreement which shall include the obligation of the agent to provide information and access to premises, systems and records when requested by the Bank.

(4) A licensee shall in selecting and contracting an agent—

(a) exercise due care and diligence; and

(b) carry out an assessment to verify that the agent—

(i) possesses registration, trading licence or permits as may be required for the performance of its commercial activities,

(ii) is compliant with statutory financial requirements, and

(iii) has qualified human capital competent to perform the required functions.

(5) Where the Bank approves the agent, the Bank shall place the name of the agent in the register.

(6) The Bank may at any time remove an agent from the register where the—

(a) licensee requests or consents to, the removal;

(b) licensee has obtained registration through inaccurate and false information; or

32. Duties of agents

(1) A licensee may appoint an agent to perform duties on behalf of the licensee.

(2) A contract for agent services shall not be exclusive.

(3) An agent may provide services to more than one licensee provided that the agent has—

(a) a separate contract with each licensee for the provision on electronic payment services; and

(b) the capacity to manage the transactions for the different licensees.

(4) An agent may—

(a) send, receive, store or process payments and provide other services in relation to electronic payment services;

(b) own, possess, operate, manage or control a public switched network for the provision of payment services;

(d) provide cash services; or

(e) provide such other ancillary services.

(5) An agent may redeem electronic money on behalf of a licensee, but shall not issue electronic money on its own behalf.

(6) A licensee shall train and supervise an agent to—

(a) provide customer support and education on electronic payment services; and

(b) report all transactions and customer complaints.

(7) A licensee shall ensure that—

(a) branding and marketing is adequate for easy customer identification by agents; and

(b) all tariffs and charges are prominently displayed, along with the licensee’s customer service contact details.

(8) A licensee shall continuously monitor the liquidity of the agent.

(9) A licensee shall be liable to the customer for the conduct of its agent in the performance of its electronic payment services within the scope of the agent’s contract agreement.

PART VI
Miscellaneous Provisions

33. Confidentiality of information

(1) A licensee, director, employee, agent or any other person who by virtue of his professional relationship with the licensee has access to the records of the licensee, during or after his relationship with the licensee shall not directly or indirectly disclose any information he may acquire in the course of his duties concerning a customer’s electronic payment account without the written permission of the customer.

(2) A licensee director, employee, agent or any other person who by virtue of his professional relationship with the licensee has access to the records of the licensee during or after his relationship with the licensee may subject to subregulation (1) disclose information where required to do so—

(a) to the Bank;

(b) by an Act of Parliament; or

34. Co-operation

The Bank may enter into co-operation with other public authorities and foreign authorities for the better carrying out of these Regulations.

35. Access to information by Bank

(1) The Bank shall, for purposes of exercising its supervision role, have access to any relevant information in possession or under the control of a licensee or commercial bank related to the provision of electronic payment service.

(2) The Bank may in the performance of its functions under subregulation (1)—

(a) conduct off-site and on-site inspections at the premises of a licensee and its agents or of a commercial bank, and may enter at any time, and without prior notice, any premises where the licensee or commercial bank is carrying on business or any premises where the Bank reasonably suspects that any business is carried out in contravention of these Regulations;

(b) institute an audit or investigation of the licensee or commercial bank;

(c) by notice, require an officer of the licensee or commercial bank to produce or furnish to the officer of Bank conducting an examination, in such manner and form as the Bank may specify and within a reasonable time,—

(i) such books of accounts and any other document in possession or control of the licensee or commercial bank, or

(ii) information relating to the affairs of the licensee or commercial bank as may be required by the examining officer; and

(d) require a licensee or commercial bank to put in place such remedial measures as the Bank may consider necessary after an inspection, audit or investigation under these Regulations.

(3) The Bank shall, where the licensee fails to produce books of accounts, records, documents, correspondence, statements or other specified information without reasonable excuse, issue the licensee with a 14 days’ notice to show cause why its licence should not be revoked.

36. Offences and penalties

A person who fails to comply with the provisions of these regulations shall be guilty of an offence and shall be liable to a fine not exceeding P5 000.

37. Transitional provisions

(1) An electronic service provider who commenced operation of electronic payment service business before the commencement of these Regulations shall comply with Regulations within 12 months from commencement of these Regulations.

(2) An electronic service provider who fails to comply with subregulation (1) shall be guilty of an offence and shall be liable to a fine not exceeding P5 000.

SCHEDULE 1

FORM A
APPLICATION FOR LICENCE AS AN ELECTRONIC PAYMENT SERVICES PROVIDER (EPSP)

(reg. 4)

NOTE: This application shall be filled in Capital Letters
1.	NAME OF APPLICANT (as it appears in the certificate of registration):	M/S:
2.	TYPES OF ELECTRONIC PAYMENT SERVICE(S) PROVIDED	Electronic Money Issuance
Account-Based Payment Services (placing of cash on, or withdrawal of cash from a payment account, credit transfer, direct debit, card payments
Issuing of payment instruments – Acquiring of payment transactions)
Non -Account Based payment Services (Money Remittance)

3.	APPLICANT’S CONTACTS
	Physical Address/ Corporate seat
Postal Address
Telephone and Fax number
	Email Address

4. PARTICULARS OF SHAREHOLDERS/BENEFICIAL OWNERS
Name	Nationality & Identity Number	Telephone Numbers & Email Address	Business Title / Occupation	Percent of Shareholding / Percent of Voting Rights	Number of shares owned	Individual /Non individual
1.
2.
3.

5. DESCRIPTION OF YOUR PAST AND CURRENT ACTIVITIES IN BOTSWANA AND ABROAD
SHAREHOLDING (DIRECTLY OWNED OR THROUGH NOMINEES)
Company’s Name	Date of Incorporation	Amount of shareholding	Percent of shareholding	Past shareholding	Remarks
				A	B

A: Refers to date of sell, transfer, closure or surrender of shares

B: Refers to reasons for sell, transfer, closure or surrender of shares

6. PARTICULARS OF DIRECTORS AND MANAGERS IN ORDER OF SENIORITY

Name	Function	Educational qualifications and experience

7. PARTICULARS OF EXTERNAL AUDITOR

Name: ………………………………………………………………………………………………………………

Address …………………………………………………………………………………………………………….

Registration Number …………………………………………………………………………………………….

Contact Person …………………………………………………………………………………………………..

8. DECLARATION (by Shareholders):

I/We, the undersigned, hereby declare:

(a) THAT the particulars set out herein are correct to the best of my/our knowledge and belief;

(b) THAT I am/we are not undischarged bankrupt and that I/we have never been convicted of fraud or dishonesty;

Name ………………………………………………………………………………………………………………

Signature ………………………………………………………………………………………………………….

Name ………………………………………………………………………………………………………………

Signature ………………………………………………………………………………………………………….

THIS DONE AND SWORN TO ME THIS ……………………………………………………………. DAY
OF ………………. 20 ………

…………………………………..

COMMISSIONER OF OATH

POSITION ………………………….

TIME ………………………………..

FORM B
APPLICATION AS A DIRECTOR

(reg. 4(3)(b))

To be completed by prospective directors/senior managers of the Electronic Payment Service

Provider applicant

1. Electronic Payment Service Provider Trading Name:

2. Name of applicant:

Residential address: Postal address: Mailing address:

Telephone No: Fax No: …………………………….. E-mail address: ………………………………….

Business: ……………………………………..

Mobile: …………………………………………

List other bodies corporate of which you are a director, shareholder (use additional sheet if extra space is required)

Company: Title: Dates:

I ………………………………… the undersigned, acting as a principal/promoter, declare that the information stated above is true.

Signed:

DATED this ………………………….. day of …………………………… 20 ……

FOR OFFICIAL USE

Form C Completed:

Approved: Rejected:

FORM C
QUESTIONNAIRE FOR INDIVIDUALS WHO ARE HOLDING, OR ARE PROPOSING TO HOLD, THE OFFICE OF A DIRECTOR OR SENIOR MANAGER, OR SHAREHOLDING IN AN ELECTRONIC PAYMENT SERVICE PROVIDER

(reg. 4)

To be completed and signed by each of the (prospective) directors, shareholders and all other senior management officials of the Electronic Payment Service provider applicant.

(This questionnaire should be submitted together with the application form to Bank of Botswana).

Name of the Electronic Payment Services Provider in connection with which this form is being completed:

A. PERSONAL DETAILS

(1) Individual’s Full Name: ………………………………………………………………………………

(2) Former surname(s) and or forenames(s) by which you may have been known:

………………………………………………………………………………………………………………..

(3) Date and place of Birth: …………………………………………………………………………….

(4) Postal Address: ………………………………………………………………………………………

(5) Current residential address:

Dates resident at this address: From: ……………………………

(If your current residential address has changed in the last three years, please provide details of all previous addresses of the last three years)

(6) Your nationality and how it was acquired (birth, naturalisation or marriage). If applicable, a certified copy/suitable documentary evidence as proof that you were granted Botswana citizenship must also be attached.

……………………………………………………………………………………………………..

(7) Please state in what capacity you are completing this questionnaire, i.e. as a current or prospective director, senior management official (specify) or shareholder. Please state your full title and describe the particular duties and responsibilities attaching to the position(s) that you hold or will hold. If you are completing this form in the capacity of a director (under the Companies Act), please indicate whether you will assume executive responsibilities for the management of the institution’s business or whether your appointment is of a non-executive nature. In addition, please provide a copy of your curriculum vitae, unless it has already been provided.

……………………………………………………………………………………………………..

(8) Please provide details of any other bodies corporate of which you are a director, shareholder, or manager and the countries in which these are incorporated.

……………………………………………………………………………………………………..

(9) Names and address(es) of your bankers (personal and business) during the past 10 years.

……………………………………………………………………………………………………..

B EMPLOYMENT/BUSINESS RECORD

Give details of your employment history during the last 10 years up to the date of this questionnaire, including for each place of employment; details of the type of business; your title and the duties attaching to your position; the dates of employment: the name and address of your employer/s: reasons for leaving; the name; position and telephone number of two references (please submit the above information in a resume format which is to be attached) the resume should also include the following:

• Details of academic and professional qualifications with dates. Please attach certified copies of the relevant certificates;

• Other relevant training or experience; and

• Current memberships of relevant bodies, year of admission and the body’s full particulars. Certified copies of the relevant certificates should also be attached to the Curriculum Vitae.

C FIT AND PROPER CRITERIA

Please answer the following questions, giving full particulars in case a question is answered in the affirmative.

1.1 Have you or any entity with which you are associated as director, shareholder or manager, ever held or applied for a licence or equivalent authorisation to carry on any business activity in any country: YES/NO if so, give particulars:

……………………………………………………………………………………………………..

1.2 If any such application was rejected or withdrawn after it was made or any authorisation revoked, give particulars:

……………………………………………………………………………………………………..

1.3 Have you at any time been convicted of any criminal offence in any jurisdiction? If so, give particulars of the court in which you were convicted, the offence, the penalty imposed and the date of conviction:

YES/No …………………………………………. ………………………………………………..

1.4 Have you, or any entity with which you have been associated as director, shareholder or manager, been censured, disciplined, warned as to future conduct, or publicly criticised by any regulatory authority or any professional body in any country? If so, give particulars:

……………………………………………………………………………………………………..

1.5 Have you, or has any entity with which you are, or have been associated as a director, shareholder or manager, known to be the subject of an investigation, in any country, by a government department or agency, professional association or other regulatory body? If so, give particulars:

……………………………………………………………………………………………………..

1.6 Have you, in any country, ever been dismissed from any office or employment, been subject to disciplinary proceedings by your employer or barred from entry of any profession or occupation? If so, give particulars:

……………………………………………………………………………………………………..

1.7 Have you been diagnosed with any mental disability? YES/No If yes give particulars:

……………………………………………………………………………………………………..

1.8 Have you failed to satisfy debt adjudged due and payable by you on order of the court, in any country, or have you made any compromise arrangement with your creditors within the last 10 years? If so, give particulars:

……………………………………………………………………………………………………..

1.9 Have you ever been declared bankrupt by a court in any country or has a bankruptcy petition ever been served on you? If so, give particulars:

……………………………………………………………………………………………………..

1.10 Has any entity with which you were associated as a director, shareholder or manager in any country made any compromise or arrangement with its directors, been wound up or otherwise ceased business either while you were associated with it or within one year after you ceased to be associated with it? If so, give particulars:

……………………………………………………………………………………………………..

1.11 Are you presently, or do you, other than in a professional capacity, expect to be engaged in any litigation in any country? If so, give particulars:

……………………………………………………………………………………………………..

1.12 Have you currently, or have you ever been regulated by the Central Bank or any other regulatory agency (in Botswana or elsewhere) If so, please provide the business name under which the services were carried out:

……………………………………………………………………………………………………..

1.13 Have you ever applied for authorisation by the Central Bank or any other regulatory agency (in Botswana or elsewhere) and had such an application refused?

……………………………………………………………………………………………………..

1.14 Have you ever applied for authorisation by the Central Bank or any other regulatory agency (in Botswana or elsewhere) and decided not to proceed with such an application after having made it? If so, give particulars:

……………………………………………………………………………………………………..

1.15 Are you a member of any professional association or trade body (in Botswana or elsewhere)? If so, give particulars:

……………………………………………………………………………………………………..

1.16 Have you ever applied for authorisation, membership or recognition by a body described in 1.15 above and decided not to proceed with such an application after having made it? If so, give particulars:

……………………………………………………………………………………………………..

1.17 Has any qualifying shareholder, subsidiary, related undertaking or associated undertaking of the applicant been the subject of winding-up order, a dissolution or bankruptcy proceedings at any time in the previous five years? If so, give particulars:

……………………………………………………………………………………………………..

1.18 Has any qualifying shareholder, subsidiary, related undertaking or associated undertaking of the applicant been the subject of a sanction/fine/reprimand by the Central bank or any other regulatory agency (in Botswana or elsewhere)? If so, give particulars:

……………………………………………………………………………………………………..

1.19 Are you aware of any tax compliance issues that any of its qualifying shareholders/directors may have? If so, give particulars:

……………………………………………………………………………………………………..

1.20 Are you aware of any allegations of fraud, dishonesty, breach of trust, insider dealing or market manipulation in respect of any of its qualifying shareholders/directors/employees? If so, give particulars:

……………………………………………………………………………………………………..

1.21 Have you any time had any authorisation/licence to carry on investment, banking or insurance business, in Botswana or elsewhere, revoked? If so, give particulars:

……………………………………………………………………………………………………..

1.22 Have you ever been subject to any disciplinary measures by any regulatory body of which you are/or were a member?

……………………………………………………………………………………………………..

1.23 Have you changed your legal advisers in the three years prior to the date of application? If so, give particulars:

……………………………………………………………………………………………………..

1.24 Have you changed your bankers in the three years prior to the date of application? If so, give particulars:

……………………………………………………………………………………………………..

1.25 Have you changed your auditors in the three years prior to the date of application? If so, give particulars:

……………………………………………………………………………………………………..

1.26 Have any legal proceedings or administrative sanction proceedings been brought in this or any other jurisdiction against you, in which you have either been convicted or found liable, in relation to the provision of financial services in the three years prior to the date of application? If so, give particulars:

……………………………………………………………………………………………………..

1.27 Have you agreed to an out of court settlement at any time in the three years prior to the date of application in respect of legal proceedings brought against you in relation to your financial services? If so, give particulars:

……………………………………………………………………………………………………..

1.28 Are you currently involved in any proceedings of the type described in questions 1.26 and 1.27? ………………………………………………………………………………………

……………………………………………………………………………………………………..

1.29 Have your books, records or other documents ever been requisitioned or seized by any regulatory body in exercise of its powers, either in Botswana or in any other jurisdiction? If so, give particulars:

……………………………………………………………………………………………………..

1.30 Is there any additional information which you consider relevant for the consideration of your suitability or otherwise to own share capital of an institution? The omission of material facts may constitute “giving false information to a person employed in the public service” as per section 131(a) of the Penal Code (Cap. 08:01).

……………………………………………………………………………………………………..

1.31 Indicate the names, postal and email addresses, telephone numbers and positions of three individuals of good standing who would be able to provide a reference on your personal and financial integrity and honesty. The referees should have known you for at least five years.

	Name of Referee	Postal Address	E-mail Address	Telephone no:	Position (where applicable)	Relationship with applicant
1.
2.
3.

D DECLARATION/LETTER OF AUTHORISATION

I declare that the information supplied in this questionnaire is complete and correct. I also agree to provide the Bank with any supplementary information and/or clarifications, it may require, in connection with the completion of this questionnaire. I also certify that the capital to be invested in the proposed Electronic Payment Services Provider is not from proceeds of crime.

I hereby, irrevocably authorise the Bank as well as its officers or employees to obtain and or exchange information, as deemed necessary by them, with any third party, my present and past employers, foreign banking or financial or insurance supervisory/regulatory authorities, etc., for the purpose of determining my fitness and properness in providing electronic payment services to the public. I undertake to inform the Bank of any changes material to the application which arise while the application is under consideration.

NAME …………………………………………………………………………………………………………….

DATED AND SIGNED AT …………………………. THIS ……………. DAY OF ……………… 20..

WITNESSED BEFORE ME:

SIGNED …………………………………………. (Applicant)

THIS DONE AND SWORN TO ME THIS ……………………… DAY OF ………………… 20…

……………………………………

COMMISSIONER OF OATH

POSITION: …………………………………

TIME ………………………………………..

NB This form should be accompanied by the following documents:

(i) Detailed Curriculum Vitae;

(ii) Any other document as may be required by the Bank.

E DECLARATION

We declare that the particulars in this application, including the supporting documents and other material, are true to the best of my/our knowledge and that I/we have not withheld any material fact

Dated this day of 20 ….

Signed: Position:

For and on behalf of:

(Please print name of the applicant. At least two directors, including the managing director must sign the declaration. Original signatures are required).

DECLARATION (by Shareholders/beneficial owners):

I/We, the undersigned, hereby declare:

(a) THAT I am/we are not undischarged bankrupt and that I/we have never been convicted of fraud or dishonesty;

(b) That I hold the shares in my personal capacity and not as agents/nominees for disclosed or undisclosed principals; and

(c) That there are no silent partners controlling the shareholders of the company and that approval from Bank of Botswana will be obtained in respect of any subsequent changes in the ultimate beneficial ownership.

Name: …………………………………………………………………………………………………

Signature: …………………………………………………………………………………………….

Name: …………………………………………………………………………………………….

Signature: …………………………………………………………………………………………………

THIS DONE AND SWORN TO ME THIS ……………………. DAY OF ……………. 20….

…………………………………..

COMMISSIONER OF OATH

POSITION: ……………………

TIME: …………………………..

FORM D

(reg. 7(1))

LICENCE NO. ………………..

BANK OF BOTSWANA

ELECTRONIC PAYMENT SERVICE PROVIDER LICENCE

This is to certify that

………………………………………………………………………………………………………………….

is hereby licensed to operate an Electronic Payment Service under Regulation 4 of the Electronic Payment Services Regulations, 2018, subject to compliance with the provisions of all applicable laws and regulations and such other policies and directives as may be issued from time to time by the Bank of Botswana.

Signed at Gaborone this ……………………………….. day of ………………………………………

……………………….

GOVERNOR

SCHEDULE 2
APPLICATION FEE AND LICENCE FEES

(reg. 4, 5 and 9)

(a) Initial Application Fee (Excluding VAT): P 1 000
(b) Licence Fee (excluding VAT): P 10 000
(c) Annual Fee (excluding VAT): P10 000
CAPITAL REQUIREMENTS
	Minimum Core Capital	Ongoing Capital Requirement

(a) Electronic Money Issuance	P 2 000 000	The greater of:
(i) P 2 000 000
(ii) 2 % of outstanding electronic money liabilities
(b) Account-Based Payment Services (credit transfer, direct debit, card payments, issuance of payment instruments, acquiring of payment transactions)	P 1 000 000	P 1 million
(c) Non-Account based Payment Services (Money Remittance)	P 100 000	P 100 000

1. For the purposes of calculating “outstanding electronic money liabilities”, the electronic payment service providers use the greater of:

(a) Outstanding electronic money liabilities at the end of the prior business day; or

(b) Average outstanding electronic money liabilities over the previous six months.

2. The Bank reserves the right to change the fees indicated in this schedule from time to time, subject to prior notification to electronic payment service providers.

3. Payments to be made in favour of Bank of Botswana.

SCHEDULE 3
OPERATING LIMITS

(reg. 27)

A. Operating Limits for Account Based Payment Services (such as e-money account, execution of card payments, credit transfers and direct debits)

EPS providers and their agents offering payment services involving the setting up of a payment account for the customer are required to adhere to the following limits.

	Individual Customer (Handset Transaction)	Small & Medium Enterprises (registered Companies)	Retail Agents
Limits	Tier One	Tier Two	Tier Two	Tier Four
Maximum Single Transaction	P 5 000	P 10 000	P 15 000	–
Maximum Daily Transaction	P 10 000	P 15 000	P 25 000	–
Monthly Aggregated Limit	P 20 000	P 30 000	P 50 000	P 1 000 000

(a) Written requests for account closure must be processed and funds returned within 3 working days from request.

(b) The Bank reserves the right to change the limits outlined in this schedule subject to prior notifications to issuers.

B. Operating Limits for Non-Account Based Payment Services

Electronic payment services providers providing non-account based payment services to their customers are required to adhere to the following limits-
	Operating Limits
Daily/Transaction Limits	P 10 000
Monthly Aggregated Limit	P 200 000

BANK OF BOTSWANA (MAINTENANCE OF PRIMARY RESERVES BY BANKS) ORDER

(section 40)

(13th May, 2020)

ARRANGEMENT OF PARAGRAPHS

PARAGRAPH

1. Citation

2. Primary reserves requirements

3. Revocation of S.I. No. 32 of 2015

S.I. 4, 2006,
S.I. 104, 2010,
S.I. 46, 2011,
S.I. 32, 2015,
S.I. 78, 2020.

1. Citation

This Order may be cited as the Bank of Botswana (Maintenance of Primary Reserves by Banks) Order.

2. Primary reserves requirements

(1) Every bank, as defined in the Banking Act (Cap. 46:04), shall maintain reserves with the Bank of Botswana of 2.5 per cent of total Pula denominated deposit liabilities.

(2) The primary reserves requirements specified in subparagraph (1) shall be met solely by deposits at the Bank of Botswana.

3. Revocation of S.I. No. 32 of 2015

The Maintenance of Primary Reserves by Banks Order, 2015 is hereby revoked.

BANK OF BOTSWANA (DEPOSIT INSURANCE SCHEME) REGULATIONS

(section 43A)

(21st July, 2023)

ARRANGEMENT OF REGULATIONS

REGULATION

PART I
Preliminary Provisions

1. Citation

2. Interpretation

PART II
Establishment of Deposit Insurance Scheme

3. Establishment of Scheme

4. Administration and management of Scheme

5. Deposit Insurance Committee

6. Functions of Committee

7. Agreements with other institutions

8. Confidentiality

9. Limitation of liability

PART III
Deposit insurance Fund

10. Deposit Insurance Fund

11. Target Fund level

12. Emergency liquidity funding

13. Fund investment

14. Financial year

15. Accounts and audit of Fund

16. Annual report

PART IV
Membership and Premium Contributions

17. Membership

18. Certificate of membership

19. Contributions to Fund

20. Failure to pay premium contribution

21. Maintenance of data and submission of returns

22. Collaboration with Bank

23. Risk-based premium contribution

24. Cessation of membership

25. Effects of cessation of membership

PART V
Payment of Claims

26. Payment of claims

27. Limit of cover

28. Time limit for claims

29. Excluded deposits

30. Discharge of liability

31. Subrogation

PART VI
Public Awareness on Deposit Insurance

32. Information to depositors

33. Information in deposit transaction document

34. Scheme website

S.I. 86, 2023.

PART I
Preliminary Provisions (regs 1-2)

1. Citation

These Regulations may be cited as the Bank of Botswana (Deposit Insurance Scheme) Regulations.

2. Interpretation

In these Regulations, unless the context otherwise requires—

“claim” means a payment of claim made in terms of regulation 26, and “claimant” shall have a corresponding meaning;

“Committee” means the Deposit Insurance Committee established in regulation 5;

“deposit-taking institution” means a company other than a bank, which is licensed to engage in the business of accepting deposits from members of the public;

“Director” means the Director of the Scheme appointed in terms of regulation 4;

“member” means a member of the Committee in terms of regulation 5(2);

“member institution” means a member of the Scheme in terms of regulation 17;

“premium contribution” means contributions levied on member institutions in terms of regulation 19;

“protected deposit” means a deposit covered under regulation 27, and “protected depositor” shall have a corresponding meaning;

“Scheme” means the Deposit Insurance Scheme established in terms of regulation 3;

“seconded officers” means officers seconded by the Bank to the Scheme in terms of regulation 5(7)(b);

“single customer view” means several depositor accounts that are aggregated and treated as one deposit account on the basis that they are associated with each other by virtue of ownership and control by one natural person or are maintained by a depositor in the same capacity and the same right for the benefit of the depositor either in the name of the depositor or in the name of any other person; and

“target fund level” means the Fund level as determined by the Committee under regulation 11.

PART II
Establishment of Deposit Insurance Scheme (regs 3-9)

3. Establishment of Scheme

(1) In pursuance of section 43A, there is hereby established a scheme to be known as the Deposit Insurance Scheme of Botswana.

(2) The objects of the Scheme shall be to—

(a) guarantee repayment of a protected deposit in the event of failure of a member institution; and

(b) promote financial stability by enhancing public confidence in the safety of deposits and promoting the stability of member institutions.

(3) The Scheme shall have a common seal which shall be such device as may be determined by the Committee.

(4) The seal of the Scheme shall be authenticated by the signature of the Director.

4. Administration and management of Scheme

(1) In pursuance of section 43A(2)(c), there shall be seconded to the Scheme a Director who shall be—

(a) the administrative head of the Scheme;

(b) responsible for the management of officers appointed to the Scheme;

(d) responsible for the execution of decisions of the Committee, as may be required for purposes of these Regulations.

(2) Subject to the supervision of the Committee, the Director shall, in the discharge of his functions under subregulation (1)—

(a) collect relevant deposit distribution and other data in terms of regulation 21, for the determination of the appropriate premiums to be levied on member institutions;

(b) collect premium contributions levied on member institutions in terms of regulation 19;

(d) pursue claims of the Scheme against the assets of a failed member institution, as may be required for purposes of regulation 25(1)(d);

(e) apply the principles of transparency and deal with a depositor’s claim equitably on failure of a member institution;

(f) promote public awareness of the Scheme’s operations; and

(g) carry out such activities as may be necessary in the administration and management of the Scheme.

5. Deposit Insurance Committee

(1) In pursuance of section 43A(2)(c) and for purposes of ensuring operational independence of the Scheme, there is hereby established a Committee to be known as the Deposit Insurance Committee.

(2) The Committee shall consist of—

(a) four members, not being public officers, appointed by the Minister on recommendation by the Bank; and

(b) three ex officio members, who shall be the—

(i) Permanent Secretary in the Ministry responsible for finance, or his representative,

(ii) Governor, or his representative, and

(iii) Director.

(3) Members appointed under subregulation (2)(a) shall be persons with considerable knowledge and experience in finance, actuarial science, insurance, law, fund management or proven ability in related disciplines, as the Bank and the Minister may consider relevant:

Provided that one of the members shall be a representative of a recognised association of financial institutions.

(4) The Minister shall appoint a chairperson from amongst the Committee members appointed under subregulation (2)(a).

(5) A member, other than an ex officio member, shall be appointed for a term not exceeding five years and be eligible for re-appointment for a further term of five years.

(6) The Committee shall regulate its own procedure.

(7) The Bank shall—

(a) provide secretarial services to the Committee; and

(b) provide such facilities, including seconded officers, as may be necessary for proper and efficient exercise of the functions of the Committee and purposes of the Scheme.

(8) The Scheme shall, by notice published in the Gazette, publish the names of persons appointed as members of the Committee and their dates of appointment.

6. Functions of Committee

(1) The Committee shall—

(a) provide oversight functions on the administration of the Fund and management of the Scheme;

(b) ensure the development and implementation of effective contingency planning and crisis management policies and procedures for the Scheme;

(d) approve the payment of claims;

(e) issue guidelines, circulars and directives for effective execution of its function; and

(f) have all such powers and may perform all such duties as it may consider necessary or expedient to enable it to achieve the objects of the Scheme under regulation 3(2).

(2) The Committee may, for the purpose of performing the functions under subregulation (1), establish such subcommittees as it considers appropriate and may delegate to any such subcommittee such functions as it considers necessary.

(3) Subject to the specific or general directions of the Committee, a subcommittee may regulate its own procedure.

7. Agreements with other institutions

(1) The Committee may enter into an arrangement or agreement with any institution or organisation within or outside Botswana that—

(a) performs functions similar to those of the Committee;

(b) has objects similar to those of the Committee; or

(2) Where the Committee enters into an arrangement or agreement in pursuance of subregulation (1), the Committee may exchange any relevant information with the parties to the arrangement or agreement on the basis of reciprocity and on confidentiality terms as may be agreed by the parties.

8. Confidentiality

(1) A member, Director or seconded officer shall observe and preserve the confidentiality of all matters coming before the Committee and of matters relating to the affairs of the Scheme and such confidentiality shall subsist even after termination of such member’s, Director’s or seconded officer’s term of office.

(2) Any person to whom confidential information is revealed through working with Committee shall not—

(a) disclose that information to any other person unless he or she is required to do so in terms of any written law or in judicial proceedings; or

(b) use that information for personal gain.

(3) Failure to comply with this regulation shall carry the same penalty as provided under the Act.

9. Limitation of liability

A current or former member, Director or seconded officer shall not be personally held liable in respect of anything done or omitted to be done in good faith and with due care in the exercise of any power or performance of any function under these Regulations.

PART III
Deposit Insurance Fund (regs 10-16)

10. Deposit Insurance Fund

(1) In pursuance of section 43A(2)(a), there is hereby established for purposes of financing the Scheme, a Deposit Insurance Fund.

(2) There shall be paid into the Fund—

(a) an initial refundable seed capital, as may be determined by Government;

(b) monies appropriated through an Act of Parliament as an advance or grant to the Fund;

(d) funds advanced by the Bank for the administration of the Scheme;

(e) premium contributions levied on member institutions under regulation 19;

(f) interest or penalties levied on member institutions’ contributions;

(g) monies recovered by the Scheme from liquidation of a member institution;

(h) monies borrowed by the Scheme in terms of regulation 12;

(i) income accruing to the Fund through investment made under regulation 13; and

(j) monies or assets lawfully paid to, received by, or vested in the Scheme for matters incidental to the objects of the Scheme, including donations.

(3) There shall be paid out of the Fund—

(a) all expenses incidental to the—

(i) day to day management of the Scheme, and

(ii) administration and management of the Fund;

(b) monies payable to a depositor in terms of regulation 26;

(d) costs associated with resolution or liquidation of member institution.

11. Target Fund level

(1) The Committee shall, having regard to current and potential liabilities of the Scheme—

(a) determine the appropriate Fund level; and

(b) where necessary, adjust premium contributions payable accordingly to build up the Fund to its target level.

(2) Where the Fund reaches its target level, the Committee may reduce premium contributions payable by member institutions.

12. Emergency liquidity funding

In furtherance of the objects of the Scheme, the Director may, on such terms and conditions as may be approved by the Committee, borrow or establish pre-arranged funding agreements with the Bank for emergency liquidity purposes and ad hoc funding needs:

Provided that the—

(i) total amount outstanding at any one time shall not exceed 25 per cent of the Fund value or such amount as may be determined by the Committee, and

(ii) terms and conditions of any advance or funding arrangement shall be determined by the Bank.

13. Fund investment

(1) The Director shall, subject to the approval of the Committee, develop an investment policy for preservation of the Fund capital and maintenance of liquidity.

(2) The investment policy under subregulation (1) shall provide for the investment of monies paid into the Fund under regulation 10(2) in safe and liquid assets, including—

(a) investment in treasury bills, treasury bonds or other securities issued by the Government; and

(b) other securities, as may be determined by the Committee:

Provided that the Director shall publish such securities in—

(i) the Gazette,

(ii) at least two papers of national or wide circulation, and

(iii) the Bank and Scheme’s website.

14. Financial year

The financial year of the Fund shall be a period of 12 months commencing on the 1st January each year and ending on the 31st December of that year.

15. Accounts and audit of Fund

(1) The Committee shall maintain accounts and records of the Fund in accordance with national and international accounting standards.

(2) The accounts and records under subregulation (1), including financial statements of the Fund, shall—

(a) reflect the operations and financial condition of the Scheme; and

(b) in accordance with national and international accounting standards,

be audited, once a year, by an independent external auditor of good repute and recognised experience in auditing financial institutions.

16. Annual report

(1) The Committee shall submit to the Minister, within a period of three months after the end of the financial year—

(a) a comprehensive annual report on operations of the Scheme; and

(b) the auditor’s report and audited accounts of the Fund under regulation 15(2)(b).

(2) The Minister shall cause the reports in subregulation (1) to be laid before the National Assembly within 30 days after receipt of the reports.

(3) The Committee shall cause the annual report to be published within two months after submission to the Minister.

PART IV
Membership and Premium Contributions (regs 17-25)

17. Membership

(1) Membership of the Scheme shall comprise of banks and deposit-taking institutions.

(2) For purposes of subregulation (1), a bank or deposit-taking institution—

(a) licensed prior to the date of commencement of these Regulations shall be deemed to be a member of the Scheme on the date of commencement of these Regulations; and

(b) issued with a licence after the date of commencement of these Regulations shall become a member of the Scheme on the date on which it is issued with a licence.

(3) The Committee shall, every year, cause to be published a list of member institutions in the Gazette, at least two newspapers of national and wide circulation and the Bank and Scheme’s website:

Provided that the Committee shall publish the first list of member institutions within three months after the date of commencement of these Regulations.

18. Certificate of membership

(1) The Committee shall issue a certificate of membership to every member institution in such form and manner as it may determine.

(2) A member institution shall display a copy of the certificate at its main office, all its branches and outlets.

(3) A member institution that fails comply with the provisions of subregulation (2) commits an offence and is liable to a fine not exceeding P5000.

19. Contributions to Fund

(1) A member institution shall, on becoming a member institution pursuant to regulation 17, pay to the Fund a membership fee and premium contribution determined in accordance with subregulation (2).

(2) The Committee shall serve on every member institution a notice specifying—

(a) an annual premium amount to be paid by the member institution of not less than 0.1 per cent but not exceeding 0.4 per cent of the total deposit liabilities of the member institution; and

(b) the period within which the premium shall be paid, which shall not be later than 21 days after the date of service of the notice.

(3) For purposes of subregulation (2), the total deposit liabilities shall be for the 12 months preceding the date of notice.

(4) A member institution shall not offset a premium contribution on the basis of any claim against the Fund.

20. Failure to pay premium contribution

(1) A member institution that fails to pay its premium contribution as required under regulation 19 shall be liable to pay to the Fund a penalty interest charge not exceeding one-half per cent of the unpaid amount for every day the member institution continues to be in default:

Provided that the days the member institution continues to be in default shall not exceed 30 days.

(2) Where a member institution continues to be in default for a period exceeding 30 days, the Committee shall refer the matter to the Bank for further action as the Bank may deem appropriate.

21. Maintenance of data and submission of returns

(1) A member institution shall submit statutory returns showing the amount of deposits and a breakdown of relevant deposits as the Committee may require.

(2) The Committee may seek the opinion of an auditor as to whether the statutory returns submitted under subregulation (1) are correctly compiled in all material respects.

(3) The auditor under subregulation (2) shall be appointed by the member institution, subject to the approval of the Committee.

(4) A member institution shall, within five working days of experiencing any unusual liquidity problems in its day-to-day business, notify the Committee of such problems:

Provided that notification shall be in such form and manner as the Committee may determine.

22. Collaboration with Bank

(1) In order to enforce provisions of these Regulations, the Committee shall collaborate with the Bank—

(a) in conducting an examination of a member institution for purposes of analysing and auditing deposit related issues, including joint examination of a member institution with the Bank;

(b) when investigating the conduct of parties responsible for, or contributing to the failure of a member institution;

(c) where a member institution experiences financial difficulty, and intervene before the member institution becomes non-viable;

(d) in sharing information that is necessary for the effective operation of the Scheme; and

(e) on the—

(i) determination of premium contributions under regulations 4(2)(a), 11(1)(b) and 19(2)(a),

(ii) most appropriate resolution method of a failing or failed member institution,

(iii) appointment of a liquidator, and

(iv) professional disciplinary measures imposed on parties identified as having contributed to, or being responsible for, the failure of a member institution following an investigation under paragraph (b).

(2) The Committee may, in collaboration with the Bank, allow a safe and sound bank to acquire a non-viable bank and takeover its deposit liabilities.

23. Risk based premium contribution

Where it appears to the Committee that the affairs of a member institution are conducted in a manner detrimental to its own interests or the depositors’ interests, and that the continued conduct may cause loss to depositors and the Fund, the Committee may increase premium contributions of such member institution beyond the premium contribution specified in regulation 19.

24. Cessation of membership

(1) A member institution shall cease to be a member of the Scheme upon—

(a) surrender of its banking or deposit-taking licence; or

(b) cancellation or revocation of its banking or deposit-taking licence by the Bank.

(2) The Committee shall, as soon as reasonably practicable, cause to be published a notice of cessation of membership under subregulation (1) in the Gazette, at least two papers of national and wide circulation and the Bank and Scheme’s website.

25. Effects of cessation of membership

(1) A bank or deposit-taking institution that ceases to be a member of the Scheme in terms of regulation 24 shall—

(a) surrender its certificate of membership to the Committee;

(b) not assume, hold out or in any way give the impression that such bank or deposit-taking institution is a member institution;

(c) not be relieved from its obligations or liabilities to the Scheme that accrued before the cessation of its membership; and

(d) indemnify the Scheme of any payment made by the Scheme to depositors.

(2) For purposes of this regulation, a protected deposit shall not include monies received or held by a bank or deposit-taking institution and interest acquired on such monies subsequent to the date on which a bank or deposit-taking institution ceases to be member institution.

(3) Notwithstanding subregulation (2), a bank or deposit-taking institution shall be obligated to repay a person any monies received or held by such bank or deposit-taking institution, including interest acquired by the person on such monies.

PART V
Payment of Claims (regs 26-31)

26. Payment of claims

(1) Where the Bank gives written notice to the Committee that a licence of a member institution has been cancelled or revoked, protected deposits shall, subject to provisions of this Part, become payable from the Fund.

(2) Upon receipt of the notification under subregulation (1), the Committee shall, in such manner as it may determine—

(a) give notification of the unavailability of deposits to affected depositors of the member institution and members of the public;

(b) inform protected depositors of procedures to be followed when lodging a claim from the Fund, including—

(i) the manner in which claims may lodged,

(ii) agents appointed to process claims, and

(iii) where claims may be lodged; and

(3) The Committee shall, on proof of entitlement being presented by the claimant in such manner as the Committee may require, pay claims within 21 days from the date of receipt of such claims—

(a) in cash;

(b) through transfer of funds into an account of a protected depositor at another member institution; or

(4) Notwithstanding subregulation (3), the Committee may withhold payment to a third a party until the Committee receives written assignment from a protected depositor of his rights and interests in the protected deposit to such third party.

27. Limit of cover

(1) A maximum amount payable to a protected depositor in respect of the aggregate credit balance of any deposit accounts maintained by the depositor with a member institution shall not exceed P250 000 or such other amount as the Committee may determine from time to time:

Provided, that the Committee may consider the Bank closing mid exchange rate on the date of failure of a member institution to determine the extent to which a foreign currency denominated deposit shall be protected.

(2) For purposes of subregulation (1), where a protected depositor has more than one deposit account in a member institution, the deposits shall be aggregated and treated as one deposit account.

(3) The coverage limit for purposes of this Part shall be per protected depositor per bank, using a single customer view account format.

(4) In the case of a merger or amalgamation of member institutions, a protected depositor shall have separate coverage for each member institution until such time that the merger or amalgamation is concluded.

28. Time limit for claims

A claim for payment shall not be brought after expiry of two years from the date of notification under regulation 26(2)(a):

Provided that this regulation shall not apply where the Committee is satisfied that a claimant was, for reasons beyond his control, unable to make the claim within the specified times.

29. Excluded deposits

For purposes of this Part, a protected deposit shall not include—

(a) interbank deposits;

(b) deposits of the Government or institutions wholly or partly owned by the Government;

(d) deposits of owners, directors and senior management of a failed member institution;

(e) deposits of a subsidiary or associate company of a member institution;

(f) deposits held by International Financial Services Centre licensed banks;

(g) negotiable certificates of deposits or any other tradable debt funding instrument; or

(h) deposits arising from transactions that are linked to financial crime.

30. Discharge of liability

Upon payment of a protected deposit under regulation 26, the Committee shall be discharged from all liabilities to the extent of the amount of payment made.

31. Subrogation

(1) Where the Committee makes payment under regulation 26, the Committee—

(a) shall be subrogated, to the extent of the amount of payment made, to all the rights and interests of the protected depositor; and

(b) may maintain an action, in respect of the rights and interests, in the name of the protected depositor or in the name of the Fund.

(2) Upon payment of a protected deposit, the Fund shall be entitled to receive from the member institution an amount equal to the compensation paid by the Committee on account of its subrogation to the claim of any depositor or protected depositor.

PART VI
Public Awareness on Deposit Insurance (regs 32-34)

32. Information to depositors

(1) The Scheme shall provide member institutions with information, at least once a year, including public education material containing the following—

(a) general information about the Scheme;

(b) what constitutes a protected deposit and an unprotected deposit;

(d) deposit claims procedure; and

(e) any other information that the Scheme considers relevant to the depositors.

(2) A member institution shall permanently display brochures provided in subregulation (1) at its public entrance, exit doors and adjacent to each teller station in its banking hall and in any other conspicuous place at its head office, branch or outlet.

(3) A member institution shall inform depositors on its website, Automated Teller Machines screen saver, mobile applications, official stationery and print adverts that brochures provided in subregulation (1) are available in the member institution’s banking hall, head office, branches and outlets.

(4) A member institution shall on its website, Automated Teller Machines screen saver, mobile applications, official stationery and print adverts, make the following representation—

“Member of the Deposit Insurance Scheme of Botswana”.

(5) A radio, television or podcast advertisement made by a member institution shall contain the following statement in English, with Setswana translation—

“Deposits held by the member institution are protected by the Deposit Insurance Scheme of Botswana”.

33. Information in deposit transaction document

A member institution shall specify the level of deposit insurance coverage in a deposit transaction document.

34. Scheme website

(1) The Scheme shall have a website, which shall include updated information on deposit insurance, advertisements and other public awareness activities.

(2) The Committee shall formulate a communication strategy to promote public awareness on deposit insurance.