Banking Sector Draws Interest

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By Desie Heita

Windhoek

Absa is not the only bank with its eyes fixed on Namibia’s banking industry.

There have been several other interests from international to regional players in the banking industry.

“During the past months, there has been an increasing interest in the Namibian banking industry from African, regional and international players,” confirmed Lionel Matthews, Director of Banking Supervision at Bank of Namibia.

Attracting the interest is the country’s relative stable and financial sound banking industry.

Bank of Namibia granted a six-month provisional banking license to Absa Group with effect from April 15.

However, ABSA would not start with operation until the Bank of Namibia has satisfied itself that the new bank is ready and capable of commencing operations.

The assessment is due for completion by October this year, when ABSA’s provisional banking license ends.

A provisional banking license provides an institution the opportunity to conduct and complete feasibility studies in order to validate its business plan for entry into the Namibian market.

During this six-month period, ABSA is prohibited from conducting any banking business and in particular, the taking of deposits from the public.

“After six months, the Bank of Namibia in conjunction with the ABSA Group, will assess the operational readiness of the proposed bank and depending on the outcome, Bank of Namibia will then only issue a permanent banking license,” said the Bank of Namibia.

Bank of Namibia is the regulator and supervisor of the banking industry, and is responsible for assessing banking license applications and awarding those licenses should the central bank find that the applicant complies with requirements in accordance with the Banking Institutions Act and other international banking standards such as the Core Principles for Effective Banking Supervision.

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