Wednesday, 19 June 2013

Another reader comment. Bank of Botswana, are you listening?

Another comment from a reader, this time on Facebook:
"You are doing a great job. We just don't listen. I remember my friends used to think you are jealous when you spoke about Eurex, we were even talking about you the day before it collapsed. They lost and now respect but they can't tell you because they are ashamed, one thing I can tell you, they read your articles every week!!"
My reply went like this:
"Many thanks for your very kind words. One of the things that makes me angriest about scams like Eurextrade is the position in which it leaves decent people once the scheme collapses. The shame that victims feel can be as bad as the financial loss they experience. Yes, you can argue they were gullible but that doesn't mean they aren't suffering. I just hope they can convert that shame into justifiable anger that can be directed towards the local recruiting agents for the scam. And towards the various regulators with the power to stop these schemes. Yes Bank of Botswana, I'm sorry, I DO mean you. See Section 3 of the Bank of Botswana Act. You have the power."
Section 3 of the Bank of Botswana Act includes:
"3. Authority to transact banking business

(1) No person shall transact banking business in Botswana without a valid licence issued by the Central Bank."
"Banking business" is defined in the Act as, amongst other things:
"the employment of deposits in the making or giving of loans, advances, overdrafts or other similar facilities, and in the making of investments" (my emphasis)
Eurextrade sold itself as an investment scheme, as did Oil of Asia, Felmina Alliance, even pyramid schemes like TVI Express. Bank of Botswana have the power and the duty to step in and stop these things.

Ah, you might say, but these schemes operate overseas in scammer-havens such as Panama and the British Virgin Islands. That's true, but who does the recruiting for these schemes? People in Panama and BVI?

No, our neighbours do, people right here in Botswana.

But do the Bank of Botswana have the power to intervene? They most certainly do. Section 5 of the Bank of Botswana Act ("Investigation of unlicensed banking") empowers them, if they believe someone "is transacting business in violation of section 3", to inspect and retain "all books, minutes, records, cash, securities and any other documents in such person's possession or custody".

If they find evidence of wrong-doing they can then "order such activities to be suspended forthwith".

Failure to comply with the inspection can lead to the perpetrator becoming "liable to a fine of P10 000 and to imprisonment for three years."

Failure to comply with an order to stop any illegal activities can then lead to the perpetrator receiving "a fine of P2 000 for each day on which the contravention occurs or continues to occur, and to imprisonment for three years."

So let's get on with it, shall we, Bank of Botswana?

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