Banks penalised for breaching liquidity thresholds

Friday, May 29, 2015

The P2.3 billion unlocked by the Bank of Botswana (BoB) in April through halving of the Primary Reserve Requirements (PRR) has helped some commercial banks to move back above minimum regulatory liquidity thresholds.

At a press briefing held by the central bank this week, it emerged that at the peak of the liquidity squeeze, some banks fell below the minimum liquidity threshold and were subsequently penalised by the BoB.

The Banking Act prescribes that commercial banks are required to keep at least ten percent of the assets in cash or near cash local instruments to meet short-term depositor obligations.

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