Illegal deposit-taking refers to an act of receiving, taking or accepting deposits from members of the public without a valid banking licence, thus contravening Section 3(1) of the Banking Act (Cap. 46:04) (Banking Act). The Banking Act restricts transacting banking business and/or soliciting deposits of money from the public to licensed banks. Therefore, any person who peddles unlicensed business activities like pyramid schemes and/or participates in such an arrangement shall be guilty of an offence punishable by law. Banking business, as defined in Section 2 of the Banking Act, refers to “the business of accepting deposits of money repayable on demand or after fixed periods or after notice, as the case may be, by cheque or otherwise.” Soliciting deposits from the public by unlicensed entities contravenes Section 3(1) of the Act, which stipulates that “no person shall transact banking business in Botswana without a valid licence issued by the Central Bank.” Any person who contravenes this provision is liable to a fine of P2 500 for each day on which the offence occurs, and/or imprisonment for five years in accordance with Section 3(4) of the Banking Act.
Section 5(1) of the Banking Act empowers the Bank to investigate a person or entity suspected of conducting unlicensed banking business and/or illegal deposit-taking activities. According to Section 5(5) of the Banking Act, if such investigations confirm the contravention, the activities shall be suspended forthwith. In accordance with Section 5(6) of the Banking Act, any person who contravenes any order of suspension given pursuant to subsection 5, shall be guilty of an offence and liable to a fine of P2 000 for each day on which the transgression occurs or continues to occur, and to imprisonment for three years.