According to the bank, such schemes are unlawful in Botswana as the nature of their operations contravenes Section 3(1) of the Banking Act (Cap. 46:04) and Section 9 (1) of the Consumer Protection Act No. 5 of 2018. The Banking Act, in particular, restricts transacting banking business and/or advertising for or soliciting deposits of money solely to licensed banks. It is also a criminal offence, punishable by law, for any person to undertake or promote the aforementioned activities in Botswana, as that constitutes unfair trading practice. Section 5(1) of the Banking Act empowers the Bank to investigate a person or entity suspected to be conducting unlicensed banking business and/or illegal deposit-taking activities.
"The Consumer Protection Act provides that a person who participates in a pyramid scheme, multiplication scheme, chain letter scheme or any other arrangement, agreement or practice declared a pyramid scheme, commits an offence and shall be liable, upon conviction, to a fine not exceeding P100 000 or to imprisonment for a term not exceeding five years, or to both," added the bank.
Additionally, any entity or person involved in illegal deposit-taking contravenes the Banking Act and is deemed to be transacting the business of banking without a valid licence issued by the Central Bank.
"If found guilty of the offence of illegal deposit-taking and/or providing banking services without a licence to do so, the person is liable to a fine of P2500 for each day the offence occurs or continues to occur, and imprisonment for five years. Furthermore, failure to comply with the Bank of Botswana ’s order to cease and desist from such illegal operations render the owners/promoters liable to a fine of P2 000.00 on each day on which the contravention occurs or continues to occur, as well as to imprisonment for three years," concluded the bank.