BoN ushers in sweeping banking sector reforms
• By JO-MARIE ORTNER
BANK of Namibia (BoN) governor and chairperson, Johannes !Gawaxab says it is important to take good banking institution governance seriously because it directly affects the macroeconomic and financial stability.
BoN recently announced a revamped framework on the appointment, duties, and responsibilities of Directors, Principal Officers, and Executive Officers of Banking Institutions and Controlling Companies.
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The updated reforms will act as the cornerstone for good corporate governance in the banking institutions and controlling corporations tasked with upholding their social obligations to safeguard public deposits, consumers, and provide access to credit the engine that drives the economy.
Best corporate governance standards are introduced in the new framework, with an emphasis on efficient succession planning, skill development, and competences for individuals in charge of leading financial institutions.
!Gawaxab says the new charter is important to avoid systemic bank collapses which have occurred all around the world because of poor practices, including excessive risk-taking, unethical behavior, fraud and mismanagement.
“Therefore, the Determination is significant because it embeds good corporate governance principles. It also makes it possible for banking institutions to attract the best talent Namibia has to offer and onboard astute leadership teams who will account for the affairs of commercial banks. Ultimately, with good governance, trust and confidence in the financial sector will be engendered,” !Gawaxab said.
According to a BoN statement, the reserve bank announced sweeping reforms aimed at solidifying and stirring the country’s banking sector in a more lucrative trajectory.
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Under the new regulations, the central bank has placed a cap on the number of boards an individual can serve on, years an individual can serve on boards to 10 years and an age limit of 70 years for independent Directors, including the Chairperson.
The reforms which came in effect last year December as part of revised Determination, ushers in new rules for Namibian banking institutions on how to attract and retain top-tier business executives and seasoned experts to provide the necessary oversight and help develop and guide the execution of business strategies.
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