Namibia’s central bank introduces new rules to modernize banking sector

Namibia’s central bank announced on Thursday that it has introduced new banking laws to modernize the banking sector, improve regulation, and ensure transparency.

Johannes !Gawaxab, governor of the Bank of Namibia, said in a statement that the introduction of two significant regulatory acts, the Banking Institutions Act, 2023, and the Payment System Management Act, 2023, is designed to create a responsive and transformed banking ecosystem, aligning with the aspirations of a financial system that genuinely serves the Namibian people.

“I believe this new regulatory and supervisory framework, with the Bank as the regulator and supervisor, and the entire industry, shall work in tandem to bring about a responsive and dynamic financial ecosystem that maximizes shareholder value while serving the national interest. I count on all stakeholders to support us in this worthy endeavor,” he said.

The new regulations mandate Namibian banking institutions to establish independent and autonomous boards focused on ensuring effective governance, transparency, and accountability, emphasizing implementing term limits and age considerations to prevent board members from overstaying their roles and upholding their fiduciary responsibilities.

According to the central bank, the new laws also emphasize local decision-making to serve the interests of Namibians, where credit decisions and approvals will henceforth be made by persons authorized and found fit and proper by the Bank of Namibia locally.

Under the new Banking Institutions Act, the minister of finance and public enterprises is allowed to establish regulations for banking fees to address public concerns about high banking fees, the central bank said, adding that this will be done in consultation with the banking industry to ensure that financial stability is not compromised.