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| Additional information |
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| Bank of Botswana |
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Overview:
THE BANK'S VISION
The Bank of Botswana aspires to be a world-class central bank with the highest standards of corporate governance and professional excellence.
THE BANK'S MISSION
The mission of the Bank of Botswana is to contribute to the sound economic and financial well-being of the country. The Bank seeks to promote and maintain:
* monetary stability;
* a safe, sound and stable financial system;
* an efficient payments mechanism;
* public confidence in the national currency;
* sound international financial relations; and to provide:
* efficient banking services to its various clients; and
* sound economic and financial advice to Government. |
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History:
The establishment of the Central Bank, the Bank of Botswana, was preceded by negotiations for a monetary agreement with South Africa in 1972. A Monetary Preparatory Commission was appointed a year later, composed of Mr H.C.L. Hermans as Chairman (Permanent Secretary, Ministry of Finance and Development Planning, at the time), Mr P.H.K. Kedikilwe (Director of Financial Affairs, Ministry of Finance and Development Planning, at the time), Professor A.N. Mcleod of York University in Canada and Advisors from the International Monetary Fund. On September 6, 1974, the first President, Sir Seretse Khama, announced the Government’s decision to withdraw from the Rand Monetary Area. In April 1975, the Bank of Botswana and Financial Institutions bills were passed to legislate the establishment of a central bank and the framework to govern financial institutions that would fall under the supervision of the Central Bank, respectively.
In July 1, 1975, the Bank of Botswana was established under the Bank of Botswana Act, 1975, and Mr H.C.L. Hermans was appointed its first Governor. For the subsequent Governors and Deputy Governors, please refer to the table below [link]. Having decided to leave the Rand Monetary Area in 1975, it was essential for the Botswana authorities to address and resolve a number of policy issues related to the introduction of a national currency and the establishment of a central bank. The four most immediate of these issues concerned the characteristics of the new national currency, the exchange rate regime, domestic interest rates and the development and supervision of domestic financial institutions. When Botswana’s foreign exchange reserves started to increase significantly in the 1980s, it became necessary for the Bank of Botswana to develop a coherent strategy for the management of those national assets.
The Bank launched the national currency, the Pula, on August 23, 1976, replacing the South African rand which had been used as a national currency and had been circulating freely in the country.
Some of the major developments since the Bank’s establishment are as follows:-.
1975
JULY 1 – Bank of Botswana established under the Bank of Botswana Act, 1975. Mr HCL Hermans appointed first Governor.
1976
AUGUST 23 – The Exchange Control Regulations enacted and the new currency, Pula, introduced, replacing the South African rand. Pula notes (P1, P2, P5 and P10) and thebe coins (1t, 5t, 10t, 25t and 50t) put in circulation on Pula Day. The Pula pegged to the US dollar at P1 = USD1.15
1977
APRIL 1 – Government banking accounts transferred from Standard Bank of Botswana (now Standard Chartered Bank Botswana) to Bank of Botswana.
APRIL 18 – Clearing House set up within Bank of Botswana for bank cheques.
1978
JANUARY 1 – Mr B.C. Leavitt appointed Governor.
FEBRUARY 16 – P20 note introduced.
1980
NOVEMBER 6 – Pula taken off US dollar peg. Pula Basket, comprising SDR and South African rand, introduced.
NOVEMBER 24 – Mr F.G. Mogae appointed Governor.
1981
OCTOBER 9 – 2 thebe coin introduced.
1982
JANUARY 1 – Mr C.N. Kikonyogo appointed Governor.
AUGUST – Bank of Credit and Commerce Botswana Limited (BCCB) licensed as the third commercial bank in Botswana.
1987
JULY 1 – Mr H.C.L. Hermans re-appointed Governor.
1988
Change in monetary policy focus. Removal of restrictions on guide to bank charges. Measures introduced to facilitate a shift to longer term interest bearing deposit facilities and to induce market determined interest rates.
1989
A major review of financial development policies was completed with the assistance of the World Bank. The document “Financial Policies for Diversified Growth” provided the basis for extensive policy reforms from 1989 onwards. The Bank began raising interest rates to achieve levels that were positive in real terms.
1990
MARCH – ulc (Pty) Limited licensed as the second credit (leasing) institution in the country.
MAY 17 – Zimbank Botswana Limited commenced operations as the fourth commercial bank.
MAY 29 – P50 note introduced.
1991
MAY 17 – Bank of Botswana Certificates (BoBCs) introduced signifying a major change to monetary policy implementation through market forces rather than by direct control. Call account facility of the Bank of Botswana was abolished.
JUNE 20 – P1 coin introduced.
JULY 8 – Bank of Botswana took over the management of BCCB after its parent, Bank of Credit and Commerce International (BCCI), was placed in liquidation by the Bank of England. BCCB subsequently closed.
SEPTEMBER 7 – First National Bank of Botswana Limited (FNBB) commenced operations in Botswana and took over BCCB.
OCTOBER 7 – ANZ Grindlays Botswana Limited licensed, bringing to five the number of commercial banks.
NOVEMBER 30 – Demonetization of the scalloped P1 and 2 thebe coins.
1992
FEBRUARY 24 – Union Bank Botswana Limited licensed and subsequently merged with ANZ Grindlays and changed name to Stanbic Bank Botswana Limited.
1993
AUGUST 23 – P100 note introduced.
1994
JANUARY 24 – Financial Services Company (credit institution) taken over by FNNB.
FEBRUARY – A uniform reserve requirement ratio introduced and set at 3.25 percent.
AUGUST 1 – P2 coin introduced.
NOVEMBER – Zimbank Botswana Limited taken over by FNBB.
1995
JULY 10 – Bank of Botswana Francistown Branch opened for business.
NOVENBER 6 – Banking Act replaced Financial Institutions Act.
NOVEMBER 17 – Botswana acceded to IMF Article VIII status, removing all exchange controls on current account transactions, and controls on capital account liberalized.Clearing House.
1996
AUGUST – Liquid asset ratio reduced from 20 percent to 10 percent for commercial banks and from 6 percent to 3 percent for credit institutions.
1997
JANUARY 1 – Introduction of bureaux de change licensing and dual listing of shares on the Botswana Stock Exchange. Bank of Botswana Act, 1996, came into effect, reflecting changes to facilitate, inter alia, the appointment of more than one Deputy Governor.July 1 – Mr B. Gaolathe appointed Governor.
1998
MARCH 5 – National Payment Council established to explore ways of improving national payments system.
MAY 4 – Secured lending Facility (SLF) introduced for the management of short-term and overnight liquidity in the banking system.
SEPTEMBER 18 – Investec Bank (Botswana) Limited granted a commercial banking licence to provide specialized investment and private banking services.
OCTOBER 10 – A new coin series of smaller and lighter coins introduced; the 1 thebe coin demonetized.
1999
JANUARY – Repurchase Agreements (Repos) and reverse repurchase agreement (Reverse Repos) introduced to manage short term liquidity fluctuations in the domestic banking system.
FEBRUARY 9 – Exchange controls abolished.
FEBRUARY – First public Monetary Policy Statement released.
JUNE 22 – Letlole National Savings Certificates introduced.
JUNE 24 – New P10 note bearing portrait of His Excellency, President Festus G. Mogae introduced
OCTOBER 21 – Mrs L.K. Mohohlo appointed Governor.
OCTOBER 27 – New P20 note bearing portrait of composer of Botswana’s national anthem, Dr K.T. Motsete, introduced.
DECEMBER 31 – The Bank assumed responsibility for the regulation and supervision of International Financial Services Centre entities and unit trusts (enabled by the amendment of the Bank of Botswana Act and the Collective Investment Undertakings Act 1999). The Bank of Botswana Act was also amended to provide for the operation of bureau de changes.
2000
JUNE 5 – New P50 note bearing the portrait of first President of Botswana, Sir Seretse Khama, and new P100 note bearing the portrait of the three chiefs, Bathoen I, Khama III and Sebele I, who obtained British protection over Bechuanaland introduced.
JULY 1 – Bank of Botswana celebrates 25th Anniversary.
NOVEMBER 1 – Introduction of the P5 coin.
2001
JANUARY 24 – Licensing of ulc (later renamed ABC Botswana) as a full-fledged merchant/investment bank.
MARCH 26 – Bank of Baroda commenced operations having been granted a commercial banking licence to provide banking services on September 6, 2000.
NOVEMBER 2 – Licensing of ABCI as first offshore bank (in IFSC).
2002
MARCH 1 – Introduction of the Electronic Clearing House |
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