Botswana - Apply for a Licence to Establish Financial Institution

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Procedure

Apply In Person

1. The application for a Financial Institution license shall be made to the Banking Supervision Department, at the Bank of Botswana, which is the Central Bank of Botswana. Bank of Botswana Office Location & Contact Details
2. The application shall be made in writing to the Central Bank in such forms as shall be determined by the Bank. Forms are obtainable at the Bank of Botswana (Headquarter) or the Francistown Branch office, Banking Supervision Department.
3. Upon obtaining the application form, the applicant should legibly complete the form, attach all the supporting documentation as listed under the “Required Documents” section of this page and submit the complete application file to the Banking Supervision Department for consideration. Any omission of the required documents or information will render the application process incomplete.
4. The application shall be accompanied by a non-refundable application fee (currently BWP 17, 100.00 VAT inclusive), all payments should be made as per the Authority's preferable payment mode.
5. The submission of any untrue or misleading information shall render the applicant a person not fit and proper and shall constitute sufficient grounds for rejection of the application or revocation of the license, where a license has been granted.
6. Upon receipt of an application form together with the requisite application fee and supporting documents in accordance with the Banking Regulations, the Supervision Function of the Central Bank shall, within ten days, send the applicant a formal letter of acknowledgment or a letter of deficiency.
7. A letter of acknowledgment shall constitute official notice that the documents submitted were found to be complete and that the processing or evaluation may commence.
8. A letter of deficiency shall outline deficiencies in the application, provide a deadline for rectification of the deficiencies and no further action shall be taken by the Central Bank unless the deficiencies are rectified within the period prescribed.
9. Within 30 days after it has received the application, the Central Bank shall inform the Minister that it has been received and that it is being duly processed.
10. The Central Bank may request additional information relevant to the application and may also investigate as it may deem necessary for the purpose of ascertaining compliance by the applicant with all applicable laws and regulations. In such a case, the information must be submitted within the stipulated time from the date of notification. Where the applicant fails to submit the required information, the Central Bank shall reject the application.
11. The Central Bank shall, within six months after receipt of a complete application, investigate and prepare a detailed report in respect of each application.
12. The report shall indicate the decision of the Central Bank to:
    • Grant the license if it is satisfied that the application satisfies the requirements of the Act and these Regulations.
    • Grant the license subject to the fulfillment of certain conditions that it may deem necessary.
    • Grant the applicant, a limited license covering only part of the financial institution business for which it is satisfied that the applicant meets the requirements.
    • Refuse to grant the license for reasons that shall be stated in the notice of decision or letter of refusal.
13. After a successful document evaluation phase, the Central Bank shall inform the applicant, in writing, of its decision to grant or refuse to grant the license.
14. A notice communicating the decision not to grant a license shall state the grounds upon which it is based.
15. Where the Central Bank decides to grant a license, it shall, in the notice communicating the decision to grant a license, require the applicant to submit, within a period of two weeks after the date of receipt of the notice, a certificate of deposit in the name of the applicant indicating that it has deposited or invested an amount not less than the required minimum paid-up capital in such accounts or assets approved by the Central Bank, before a license can be issued.
16. Where the Central Bank issues an initial license to a new bank it shall give notice thereof in the Gazette and at least two newspapers circulating in Botswana.
17. The Central Bank may, after consultation with the Minister, determine different minimum prudential requirements for different classes of banks, and shall impose such restrictions as it may deem necessary on the structure of the business, operations, and banking services to be provided by any such class of banks. Such terms and conditions or requirements shall be endorsed on the License.
18. Successful applicants shall further be required to:-
    • Provide the Central Bank with complete operating manuals covering policies and procedures on loans, investments, deposits, foreign exchange, and other major operations of the financial institution.
    • Provide information regarding risk management policies and procedures covering credit, liquidity, interest rate, foreign exchange, and operational risks.
    • Provide information regarding management information systems, description of sample forms, reports, and schedules.
    • Provide any other documents or information, which the Central Bank may require; and
    • Pay the license fee prescribed by the Central Bank within fourteen days of receipt of the notice of a decision to license the applicant.
19. The time frame for processing the application accumulatively is within six (6) months provided everything is in order.

NOTE:

• Any person aggrieved by a decision of the Central Bank refusing to grant him or her a license may appeal to the High Court against the decision within thirty days after being notified of the decision.
• No financial institution shall open for business without prior clearance from the Central Bank which shall conduct a pre-opening inspection of the proposed premises to confirm the adequacy of the premises for the proposed business, strong room and vault and the existence of a security system, electronic equipment, and communication facilities suited to the type of financial institution concerned.

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Required Documents

• A certificate of incorporation and memorandum and articles of association.
• A business plan and financial projections for at least three years (including the assumptions underlying the projections and sensitivity analysis of the plan on varying assumptions).
• A certified copy of the resolution of the Board of Directors, authorizing the preparation and submission of the application.
• An information sheet for the applicant and for each of its substantial shareholders (if corporate), subsidiaries, or affiliates.
• Existing financial institutions and companies which have been engaged in other businesses before applying to do financial institution business should provide certified copies of audited financial statements for the past three years prepared in accordance with generally accepted accounting principles.
• If the most recent audited accounts are more than six months out of date, they should be accompanied by management accounts (which need not be audited) showing the current financial position and the current results of the institution.
• Individual credit references for the applicant and each of the substantial shareholders, directors, and officers from his or her bankers.
• Personal declaration form for each of the proposed directors, officers, and substantial shareholders (if natural persons).
• The proposed capital structure of the financial institution.
• With respect to foreign applicants, a statement from the supervisory authority of the home country declaring that it has given prior approval or a “No Objection” for the establishment of a subsidiary or any other office in Botswana and that the applicant’s chairperson, directors, managers and substantial shareholders as a whole, are fit and proper persons within the meaning of the Act.
• Any other information relating to the viability of the proposed institution or other matters which the applicant may consider relevant.
• Any other information which the Central Bank may request the applicant to provide.

NOTE: All non-original documents submitted with this application must be certified-true-copy. Copies of certified copies will not be accepted.

Office Locations & Contacts

Bank of Botswana
Gaborone Branch (Headquarter)
Address: 17938, Khama Crescent, Gaborone, Botswana
Private Bag 154, Gaborone,Botswana.
Telephone: (+267) 360 6000

Francistown Branch
Address: 9597, Thapama Circle, Francistown,
Botswana
Private Bag F212, Francistown,
Botswana.
Telephone: (+267) 241 0450, 240 0400

Banking Supervision Department
Tel: (+267) 3606354
Fax: (+267) 3913862
Bank of Botswana Office Location & Contact Details
Bank of Botswana Website

Eligibility

Applicants should meet the following requirements to be eligible.

• The applicant must be a company limited by share capital and corporate under the Companies Act, of the Banking Act.
• The statutory minimum start-up capital is P5 million. The prudential capital adequacy ratio is 12.5 percent. The promoters of the applicant bank must demonstrate the willingness and ability to provide additional financial support as and when required.
• The applicant must demonstrate adequate managerial capacity; this includes the appointment of fit and proper persons.
• In the case of the promoters of an applicant being a foreign bank, the parent bank must be subject to adequate home supervision, and the consent of the parent's home supervisor for the subsidiary to operate in Botswana must be provided.
• The proposed ownership and organizational structure must be acceptable to the Bank of Botswana, and the structure must be such that it allows for effective consolidated supervision.

Fees

• A non-refundable application fee (currently P17 100, VAT inclusive).

Validity

• The license shall be valid for an indefinite period, however, failure to compline with the conditions upon being issued may lead to it being suspended, canceled, or revoked by the Central Bank.
• The license is also subjected to an annual renewal fee.

Documents to Use

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Sample Documents

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Processing Time

• The time frame for processing the application accumulatively is within six (6) months provided everything is in order.

Related Videos

Videos explaining the procedure or to fill the applications.
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Please remove the '&' inside the tags during implementation.
Website = allocine, blip, dailymotion, facebook, gametrailers, googlevideo, html5, metacafe, myspace, revver,
sevenload, viddler, vimeo, youku, youtube
width = 560, height = 340, Video ID = Can be obtained from the URL of webpage where the video is dkisplayed.
e.g In the following url 'http://www.youtube.com/watch?v=Y0US7oR_t3M' Video ID is 'Y0US7oR_t3M'.

Instructions

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e.g. The state office holds birth records since January 1908.

Required Information

• Full Name of Applicant/Company Name
• Address of Applicant
• Location of Foreign Exchange Bureau
• License Number
• A tax clearance certificate.
• Evidence of provisional tax payment
• Full names, addresses, and designations of the employees of the bureau.
• Proof of legal identification. (Your national driver's license or an international passport is the best for this).
• Proof of legal address. (House rent receipts and utility bills stating your house address are acceptable).
• Bank statement. (Not all Authorities require this except for further verification purposes or alternatives).
• Utility Bill Receipt. (Some Authorities require this to further verify your legal identity and proof of social responsibility).
• Declaration by the applicant

Need for the Document

• No person or entity shall establish a financial institution in Botswana unless he/she is in possession of a Banking Business License issued by the Central Bank.
• The bank licensed shall at all times be displayed, in a conspicuous place in the public part of its principal place of business, and in any other office or branch or site, including a mobile site, a certified copy of the license granted by the Central Bank.

Information which might help

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Other uses of the Document/Certificate

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e.g. Birth Certificate can be used as proof of identity.

External Links

Bank of Botswana
Botswana Banking Act
Licensing Policy under the Banking Act (CAP. 46:04)

Others

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