The Bank of Botswana published a clarification of licensing requirements for banks and deposit-taking institutions under the Banking Act, 2023 and supporting regulations that took effect on 15 August 2025. The framework introduces deposit-taking institutions (DTIs) and categorises banks into Tier 1 and Tier 2 based on initial capital requirements, with a lower Tier 2 threshold intended to support licensing of smaller and medium-sized banks. Under the regime, only a company incorporated under the Companies Act and limited by shares may apply for a banking or deposit-taking licence. The process includes a pre-application meeting, submission of two hard-copy applications with supporting documents, and publication steps whereby the Bank must inform the Minister of Finance and publish notice of the application within 30 days of receipt in the Government Gazette, on its website, and in at least two newspapers. Applications are processed within six months from the acknowledgement letter, but failure to provide requested supplementary information within six months results in the application being treated as abandoned and the application fee forfeited; rejected applicants may appeal to the Appeals Tribunal within six weeks. Minimum initial capital requirements are set at the greater of BWP 20,000,000 or 12.5 percent of risk-weighted assets for Tier 1 commercial banks, and the greater of BWP 5,000,000 or 12.5 percent of risk-weighted assets for Tier 2 commercial banks; investment banks and discount houses are set at the greater of BWP 20,000,000 or 12.5 percent of risk-weighted assets, while DTIs require BWP 2,500,000. Application fees are BWP 15,000 for banks and BWP 5,000 for DTIs, with annual licence fees of BWP 50,000 for banks and BWP 10,000 for DTIs; capital must be unencumbered and applicants must undertake to provide back-up capital if needed.
Bank of Botswana 2025-11-24
Bank of Botswana outlines licensing regime for banks and deposit-taking institutions including new two-tier capital requirements
The Bank of Botswana clarified licensing requirements under the Banking Act, 2023, categorizing banks into Tier 1 and Tier 2 based on initial capital requirements to support smaller banks. Only companies incorporated under the Companies Act may apply, involving pre-application meetings and publication steps. Minimum capital requirements are BWP 20 million for Tier 1 banks and BWP 5 million for Tier 2 banks, with specific fees for applications and annual licenses.