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Banks to keep register of employees involved in financial misconduct

Publishing Date : 17 September, 2019

Author : LAWRENCE PAGANGA

Local financial institutions have been encouraged to introduce and maintain a list of its employees who are dismissed from work on the basis of being found to have committed serious financial misconduct including fraud.


The list, according to the Financial Stability Council (FSC), would assist the financial sector from employing serial fraudsters, which the council calls “rolling bad apples”.  The FSC noted that scores of these serial fraudsters were managing to get employed in other financial institutions where the committed similar offences because there was no mechanisms to monitor them.


This decision is one of the several assessments of vulnerabilities and risks that the FSC made when it met recently in Gaborone to deliberate on several market, regulatory and public interest developments and issues relating to the stability and performance of the financial sector. “(There is need in) addressing the ‘rolling bad apples’ phenomenon, which relates to individuals accused of financial misconduct in one institution ending up at another financial institution without disclosure of previous misconduct,”  the head of communications and information services at the Bank of Botswana, Seamogano Mosanako said after the FSC meeting.


The FSC felt the register of the serial fraudsters would protect clients’ funds and the financial industry from employing flagged fraudulent employees. “Strict application of the ‘fit and proper’ requirements, and introducing responsibility mapping to ensure that individuals are held accountable for their actions,” the FSC resolved. Financial institutions were then encouraged to keep a register, for industry reference, a list of staff members fired from work for serious financial misconduct.


“Financial institutions are being encouraged to introduce and maintain, for industry reference, a list of staff members terminated (or) released from duty on the basis of being found to have committed acts of impropriety, dishonesty and other forms of serious misconduct,” Mosanako said. She added financial regulators were also routinely reassessing the fitness and propriety of employees in functions deemed capable of causing significant harm to the financial sector or its customers.


“The respective regulators will continue to enforce and enhance measures that are aimed at improving professional and ethical conduct by both individuals and firms in the financial services industry,” said Mosanako. In its summarised financial results for the year ended 30 June 2019, the First National Bank of Botswana said it had put in place strict requirements in ensuring that it attains trustworthy employees through retaining top talent in the market.


“Achieving these goals is underpinned by the bank’s success in attracting, training and retaining the top talent in the market,” the bank said in its annual report. The FSC was launched in February this year and comprises senior officials from the Ministry of Finance and Economic Development, the Bank of Botswana, the Non-Bank Financial Institutions Regulatory Authority (NBFIRA) and the Financial Intelligence Agency (FIA).  Its goal is information sharing, cooperation and the analysis of economic and financial policy in Botswana.

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