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Swaziland’s Banking Sector Set to Welcome New Entrants

The Central Bank of Swaziland has announced that it is now accepting applications for banking licenses, paving the way for new financial institutions to enter the market. This move is expected to boost competition and improve services offered to customers.

Eligibility Criteria

To be eligible for a license, applicants must demonstrate:

• A minimum paid-up capital of E15 million
• An additional requirement of eight percent of risk-weighted assets
• Meet stringent requirements related to management, including the appointment of directors who are deemed fit and proper persons

Requirements for Management

The bank’s management will need to demonstrate:

• Ability to attract and maintain community support
• Effective competition in areas such as:
  • Access to banking services
  • Cost of services
  • Quality of services
  • Development of new banking business
  • Staff training
  • Financial terms offered

International Standards

In addition to the minimum required capital, applicants will be expected to meet international standards for capital adequacy, including those set by the Basel Committee on Banking Supervision.

Background Investigations

The Central Bank has also outlined specific requirements for management, including:

• Background investigations into the personal and professional history of proposed directors
• Contact with law enforcement, tax, and other regulatory authorities to uncover any past illegal or unethical conduct by members of the proposed management team

Requirements for International Banks

International banks and banking groups will be required to obtain prior consent from their home country supervisory authority before applying for a license in Swaziland.

Commitment to Promoting a Safe and Sound Banking Sector

The Central Bank has emphasized that it is committed to promoting a safe and sound banking sector, and will only consider applications from companies incorporated or intending to be incorporated under the Companies Act of Swaziland.

Application Process

Applications for banking licenses can be submitted to:

The General Manager, Financial Regulation, Central Bank of Swaziland, P. O. Box 546, MBABANE

Investigation and Annual Fees

In consideration of the costs incurred by the Central Bank in carrying out its investigation function for banking license applications, the following fees are payable:

• Investigation fee: E5,000
• Annual licence fee for first or only place of business: E1,000
• Annual licence fee for every other place: E500
• Registration of change of name: E500
• Annual fee for agents: E500

Conclusion

The Central Bank is expected to receive several applications in the coming weeks, with a view to issuing licenses to successful applicants in due course.