The Competition Authority meets Bank of Botswana

The Competition Authority and Bank of Botswana Management met on March 7th 2013 for purposes of making presentations to each other about their respective mandates. This meeting was essential as it is a precursor to the negotiations of the Memorandum of Understanding that both agencies will enter into. The delegation from the Competition Authority was led by its Chief Executive Officer Mr Thula Kaira and the Bank of Botswana team by Director of Banking Supervision Mr Andrew Motsomi.

In his overview, Mr Motsomi said that BoB has measures in place to implement in the sector to promote innovation, however he added that competition in the banking sector is inherently imperfect. He also mentioned that BoB has been agonizing about how the central bank should handle issues of mergers and acquisitions.

Mr Motsomi said cooperation with the Competition Authority will help in safeguarding against some unfair business practises that banks may engage in that could threaten the stability of the banking system which they are trying to preserve as they are tring to keep with international banking practices.

Mr Kaira added on to say that cooperation between the two regulators will be necessary in order to help them to synchronise thoughts in matters that will affect each other since the Competition Authority does not deal with matters of monetary policy. He said that competition is the best way of adding value to the economy and that cooperation between the two regulators will assist the Competition Authority in dealing with anti-competitive practises in the banking sector.

He added on to say that regulatory harmony is important so that they tap into each other’s distinctive competence, which can help in averting a crisis. Mr Kaira said that working together will also be beneficial so that they are not institutions from the same government but with opposing views.