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Namibia Enforces 25% Minimum Threshold on Local Bank Ownership

The deputy governor of the Bank of Namibia (BoN), Ebson Uanguta, says Namibia is making reasonable strides towards promoting local ownership of banks.

He says the BoN has set a legal framework reserving a minimum threshold stake of 25% in all commercial banks for locals.

Speaking at a media event on Tuesday, Uanguta said some commercial banks already exceed the set threshold, a sign that the country is making significant progress towards improving local participation in the banking sector.

“I am not saying 25% is the best at the moment, but I must say we are the only sector that is at least making progress in this regard.

“We are doing this in such a way that everyone plays their part, and we also engaged the banks first to have them do it voluntarily, and quite a few are doing well, with some even being above the 40% threshold, which is encouraging because they are doing it on their own,” he said.

The decision to implement the threshold is part of the raft of laws adopted by Namibia to deal with a variety of issues including localisation, stemming off money laundering, improving efficiency of the banking sector. The laws were adopted during the parliament’s last seating. The ownership issue is dealt with in the banking instructions act.

Uanguta said the central bank is also making steady progress towards finding a long-lasting solution to the repossession of houses and other properties from defaulting clients.

He said the central bank is working with the Ministry of Justice and all other government stakeholders to close all loopholes that could result in people losing their homes for failing to service their debt.

“In this regard, the bank issued the determination of policy changes in response to economic and financial stability challenges to cushion affected households and businesses.

“However, the bank has expressed its commitment to working with stakeholders to find viable solutions to address these pressing challenges while maintaining financial stability.

“The bank has also acknowledged the various initiatives being undertaken by the Ministry of Justice to reform legal processes to ensure the protection of the interest of both homeowners and lenders,” Uanguta said.

He said a multisectoral approach with the buy-in of all stakeholders would go a long way in protecting both the banks as well as those who are servicing loans.

Turning to the long-standing issue of whether Namibia will at some point consider delinking the local currency from the South African rand, Uanguta said: “Currently the benefits outweigh the disadvantages, but should the situation change and delinking favours us, we will make decisions that tally with that situation.”

Meanwhile, the BoN said it is working to fine-tune the regulation of virtual assets in Namibia to protect the public from would-be scammers.

Central bank deputy governor Leonie Dunn said the regulation of virtual assets would create “safety and sanity” for the transacting public in future.

“We have come up with legislation that will see the Bank of Namibia regulating everything to do with virtual assets and will protect Namibians from losing their money.

“The regulation will see the central bank regulating all the operations of virtual asset traders, including cryptocurrency,” she said.

Dunn reiterated that regulation is a key component of creating sanity in the sector, and would make it easier to monitor transactions.

She said the bank would make sure those dealing in the virtual asset space are credible.

Dunn said the regulatory framework has been put in place to make sure regulation is in the best interest of all Namibians and eliminates potential flaws.

Both Uanguta and Dunn said the central bank remains committed to its mandate of controlling inflation and maintaining stability of the local monetary unit.

Source : Namibian