By 
By Delisa Thwala
As part of its current strategy, the Central Bank of Eswatini (CBE) seeks to bring in more banks to Eswatini, which range from Islamic to Investment Banks.
Since announcing this move last month, the Central Bank of Eswatini (CBE) Governor Dr Phil Mnisi has revealed that, they currently have 3-5 applications from local and international institutions on table, applying for the licensing.
This was revealed by Mnisi during a question and answer session during a media engagement held at the CBE’s boardroom.
Mnisi said even though it was early to say or give away the names of the institutions, he assured that they were receiving applications at an impressive rate.
“I can confidently say we have close to five applications on the table, there are still talks and we cannot reveal the names of the institutions now but there is interest,” said Mnisi.
He further mentioned that mentioning and revealing their names, would also jeopardise future negotiations and compromise them.
Further the Governor said, the prospects of onboarding new service providers in the banking sector remain in sharp focus, particularly with the advent of various technological advancements that have changed how people interact with banking institutions.
Similarly, the Central Bank is refreshing its policies and regulations relating to the licensing of banks to cast the net wide in attracting qualifying and credible institutions.
In October, The Central Bank of Eswatini announced its plans to bring on board new banks into the country.
In an advertorial published in the Times of Eswatini, the CBE notes that prospects of onboarding new service providers in the banking sector remain in sharp focus.
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The Bank states that this move is part of its current strategy which is meant to cast the net wide and attract qualifying and credible institutions.
The CBE outlined five categories of banks that may be licensed in the country. It is worth noting that the maximum financial requirement to obtain a banking license is E50 million, while the minimum is E8 million.
Category A- Large Commercial & International Banks
Description- Category of banking license issued for banking operations which are either domestically owned or majority foreign-owned subsidiary companies with significant international banking interests.
Start-Up Capital: E50 million, which must be always maintained.
Permissible Activities: Permitted to engage in a wide range of banking activities, including international banking, maintaining accounts in major currencies, accepting deposits from non-residents, offering credit facilities, money transmission services, issuing means of payment, trading money, supporting safe custody of valuables and also be compatible with electronic banking and other services.
Category B- Medium-Sized Commercial Banks
Description- These institutions, whether domestically owned or subsidiaries of foreign corporations with a 10% stake held by Emaswati or Eswatini-owned enterprises.
Foreign ownership is capped at 90% of common stock in this category, which includes deposit-taking institutions, and was established to give credit and savings opportunities to small and medium-sized enterprises (SMEs), micro-industries, and marginalized populations in Eswatini.
Start-up Capital: E30 million, which must be always maintained.
Permissible Activities: Allowed to engage in accepting deposits, lending, investing in financial securities, providing money transmission services, issuing means of payments, trading in money market instruments and they can also provide some services offered in Category A.
Category C- Regional & Small Finance Institutions
Description- This type of banking license applies to deposit-taking institutions which are established to promote financial inclusion by giving credit to small businesses, remote and small farmers, micro and small industries, and other small to medium-sized market segments.
Start-up Capital: E8 million, which must then be always maintained.
Permissible Activities: Allowed to engage in accepting deposits of up to E500,000 per depositor, conducting foreign exchange with approval, lending microfinance loans, making remittances, providing payment services, and other activities.
Category D- Restricted License Banks
Wholesale Banks
Description- A company or subsidiary whose common stock is majority owned by an individual Swati or Eswatini-owned parent company, with a foreign shareholding limited to 49%.
Start-up Capital: E30 million, which must then be always maintained.
Investment Banks
Description- Banks that engage in public/ private offerings, issuer transactions, advisory and international finance.
Start-up Capital: E50 million, which must always be maintained.
Digital Banks (also known as virtual banks, neobanks or online banks)
Description- Banks that deliver retail banking services through the Internet or other forms of electronic channels instead of physical branches.
Agents of foreign bank/representative
Description- Foreign financial institutions which cannot conduct banking business as a bank in Eswatini upon fulfilling certain prescribed conditions.
Agent of a locally incorporated bank
Description- Must apply for an agent banking license to conduct banking business on behalf of a licensed financial institution in Eswatini.
NB: For Permissible Activities under this category please visit www.centralbank.org.sz
Category E- Islamic Bank
Description- A sound Islamic bank shares the same hallmarks of a sound conventional bank, all of which are evaluated under the licensing criteria of this policy.
Start-up Capital: E8 million, which must then be always maintained.
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Permissible Activities: Accepting Shariah-compliant money placements/ deposits for safekeeping without the need for security, offering Shariah-complaint financing products, managing unrestricted and restricted Shariah profits-sharing investment accounts, and providing money exchange and remittance services.
Meanwhile worth, mentioning is that the, the CBE is charged with the responsibility and mandate of licensing, supervising and regulating banks so that they are not just business motivated by profit-making but also serve the nation’s broad economic interests.
This is because the impact of a bank’s collapse is greater than that of an ordinary company, according to a comminute shared by the bank.
It mentions that, to undertake the assessment and evaluation of a bank license application, the Bank is guided by the provisions of all applicable and relevant financial services laws in the country.
Furthermore, the process must pass the muster of international best practice. The Bank has crystalized these applicable standards and processes in the CBE Policy on Licensing of Banking and Financial Institutions No.1 of 2021.
“The purpose of the Policy is to: establish licensing criteria and conditions to ensure that only sound and prudently managed banks or financial institutions are licensed to operate in Eswatini; provide for the standardization of licensing applications and minimum information requirements,’’ reads the communique.
