31st October 2022
Sello Motseta
The Ministry of Finance and Economic Development has officially launched the Non-Bank Financial Institutions Tribunal under Section 50 of the NBFIRA Act,2016 to review decisions made by the Non-Bank Financial Institutions Regulatory Authority(NBFIRA)or Self-Regulatory Organizations such as the Botswana Stock Exchange(BSE).
It is to designed to promote public trust and confidence in various conflict resolution mechanisms whilst also developing accessible and cost effective methods of challenging the decision making process of NBFIRA and SRO’s. It commenced operations on the 10th October, 2022.
This independent, adjudicative entity housed by the Motor Vehicle Accident Fund(MVA) comprises 5 independent members with vast expertise in non-bank financial services.
“In terms of the Act, every decision of NBFIRA or the SRO, made in terms of the relevant financial service law may be subject to a review by the Tribunal if brought before the Tribunal. The tribunal may also on its volition, for specified purposes related to the effective regulation of the non-bank financial sector, cause a review to be conducted on any decision of NBFIRA or the SRO even if it has not been brought before the Tribunal,” said Thuto Senwedi, Secretary of the tribunal.
He said, “On hearing an application for review, the Tribunal can confirm, amend or revoke the decision made by NBFIRA or the SRO .The tribunal may also order with directions that, the matter be reconsidered by NBFIRA or the SRO.”
Senwedi maintained that any person who is dissatisfied with the decision of the Tribunal may appeal to the High Court for judicial review within 28 days of receipt of the decision.
The application for review is accompanies by a non-refundable fee of P500 payable at Old Building, ground floor, Ministry of Finance Headquarters. The Tribunal through a notice of hearing sets the hearing dates, time and the location of the hearing.
The Non-Bank Financial Institutions(NBFI) sector is a strategic sector with assets worth P153 billion in 2022(P129billion in2021)and the sector accounts for a significant portion of Botswana’s GDP.
It overrides the previous arrangement where the Minister could revoke, uphold or vary a decision of NBFIRA under section 118 of the old Insurance Industry Act. It means that if an insurance company refuses to pay a claim on the basis that the policy does not cover a particular loss, the Tribunal can provide justice fast and cheap for complainants.
The Ministry of Finance and Economic Development has also announced the commencement of the Retirement Funds Bill,2022. This means that all pension matters considered with effect from the 14th October 2022 will be in accordance with the new law.
“One of the major changes in the Retirement Funds Act is that, retiring members can now commute up to 50%of their pension compared to one third in the Old Act. Those who have already commuted their one third pension cannot comeback for a top up to make it 50% in accordance with the new Act, as they have already entered into contracts in relation to receiving their pension annuity monthly. That is, the law is not implemented in retrospect.
So far, there are no withdrawals allowed for active members and pensioners. The current Act just provides enhanced withdrawals for deferred members.
“The minimum threshold to be encashed in full at retirement has been increased from the current annual pension of P5000 to an annual pension of P20,000,” said Phineas Sesinyi, Acting Director for Non-Bank Financial Institutions Regulatory Authority(NBFIRA).
He said, “A study is being conducted through NBFIRA to review the effect and impact, on the pension system of allowing withdrawals. The study findings will inform subsequent amendments to the Retirements Bill 2022.”
