ARRANGEMENT OF SECTIONS

PART I
Preliminary

SECTION

1.        Short title

2.        Interpretation

3.        Application

4.        Name of terminating society

PART II
Registration of Societies and Matters Incidental thereto

5.        Prohibition of unregistered society

6.        Mode of forming society

7.        Matters which must be provided in rules of society

8.        Alteration of rules

9.        Rules open to public

10.        Registration of societies

11.        Registrar may inspect books and accounts of any association

12.        Effect of registration

13.        Conclusiveness of certificate of registration

14.        Cancellation or suspension of registration

15.        Name of society

16.        Change of name of society

PART III
Powers of Societies, Deposits, Shares, Advances and Financial Provisions
with respect to Societies

17.        Powers of society

18.        Minors and married women may be members of society

19.        Conditions in regard to savings deposits and fixed deposits

20.        Maximum savings deposit or fixed deposit by individual

21.        Saving in the case of deposits by a trustee

22.        Conditions relating to shares

23.        Maximum shareholding by individual

24.        Society may redeem share in certain circumstances

25.        Advances must be reducible or fixed-term advances

26.        Limit as to amount of advance

27.        President may guarantee repayment of advances

28.        Limit as to amount of advance when President has guaranteed repayment

29.        Method of calculating interest must be stated in advertisement relating to advances

30.        Advance on property already mortgaged prohibited

31.        Society may make further advances for certain purposes

32.        Limitation as to sum total of advances

33.        Valuation of property for purposes of advance

34.        Valuator must have no pecuniary interest in advance

35.        Duty of director, etc. to disclose interest in advance

36.        Society may recover certain amounts in addition to amounts entitled to under mortgage or cession

37.        Registrar may examine books of society

38.        Non-compliance with Act does not invalidate advance

39.        Establishment of statutory reserve fund

40.        Restriction on pledging of investments and mortgages

41.        Restriction on borrowings

42.        Society must hold certain amount daily as security for repayments

PART IV
Management and Administration

43.        Head office of society

44.        Financial year of society

45.        Periodical statements as to financial position

46.        Annual accounts

47.        Society must provide fidelity cover

48.        Annual and special general meetings

49.        Minutes of proceedings of meetings of society or directors

50.        Inspection of minute books

51.        Keeping of books of account

52.        Appointment of auditors

53.        Disqualifications for appointment as auditor

54.        Contents of auditor's report

55.        Auditor's right of access to books and to attend general meetings

56.        Investigation of society's affairs on application of members

57.        Investigation of society's affairs in other cases

58.        Production of documents and evidence on investigation

59.        Inspector's reports

60.        Proceedings on inspector's report

61.        Expenses of investigation of society's affairs

62.        Saving for attorneys and bankers

63.        Inspector's report to be evidence

64.        Directors and secretary

65.        Validity of acts of directors

66.        Disqualification for appointment as director

67.        Amalgamation of two or more societies

68.        Modes of winding up

69.        Liability of members

70.        Liability of borrowers

71.        Judicial management of society

PART V
Foreign Building Societies

72.        Registration of foreign building societies

73.        Provisions of this Act to apply

PART VI
General

74.        Lost or destroyed share certificates, etc.

75.        Inspection of documents by public

76.        Default in rendering accounts and furnishing information

77.        Acceptance of benefits prohibited

78.        False statements

79.        Default in complying with financial provisions

80.        Evidence

81.        Penalties

82.        Regulations

First Schedule

Second Schedule

Third Schedule

Proc. 36, 1961,
H.C.N. 17, 1963,
HMC Order 1, 1963,
L.N. 84, 1966,
Act 43, 1970,
Act 70, 1970,
Act 39, 1978,
Act 1, 1986,
Act 18, 2006.

An Act to provide for the control of building societies.

[Date of Commencement: 3rd May, 1961]

1.       Short title

            This Act may be cited as the Building Societies Act.

2.       Interpretation

            In this Act, unless inconsistent with the context-

            "advance" includes one or more advances on the security of a mortgage or a cession of a lease of one property or of two or more properties jointly;

            "approved investment" means an investment approved in terms of section 17(1)(j);

            "authorized deposit" means a deposit mentioned in section 17(1)(g);

            "board of directors", in relation to any society, means the managing body thereof by whatever name it may be called;

            "cession" means a cession of a registered lease of immovable property, the unexpired period of which is at the date of cession not less than 30 years;

            "court" means the High Court of Botswana and in relation to any offence under this Act includes a magistrate's court having jurisdiction in respect of that offence;

            "director" includes any person occupying the position of director or alternate director of a society by whatever name he may be called;

            "fixed deposit" means a deposit for a period which is fixed in accordance with the provisions of section 19(e);

            "fixed-period share" means a paid-up share issued for a period of five years or for a longer period which may not be redeemed before the expiry of the period for which it is issued;

            "fixed-term advance" means an advance on terms and conditions which provide for the repayment of the capital amount advanced within a fixed period;

            "general reserve fund" means any general reserve fund established by a society other than a statutory reserve fund and built up out of profits and not set aside for any specific purpose;

            "member", in relation to a society, means a person who holds shares therein, whether fully or partly paid-up, which participate in the profits thereof whether or not such shares are held by the society as security for an advance;

            "mortgage" means a mortgage of immovable property;

            "officer", in relation to a society, means any director, manager, secretary, clerk, agent or other employee of the society but does not include an auditor of the society;

            "permanent share" means a fully paid-up share of which the holder is not entitled at any time to demand redemption but which the society may redeem after six months' notice to the holder if its rules so provide;

            "prescribed" means prescribed by regulations;

            "reducible advance" means an advance on terms and conditions which provide for the reduction of the capital amount advanced by periodical payments;

            "Registrar" means the person holding the post of Permanent Secretary, Ministry of Finance and Development Planning, and includes any officer acting as such for the time being;

            "savings deposit" means-

     (a)     a deposit other than a fixed deposit;

     (b)     a deposit for a fixed period not exceeding 12 months;

            "secretary", in relation to a society, includes any executive officer of the society acting in the capacity of secretary;

            "society" means a building society as defined in section 3;

            "statutory reserve fund" means a statutory reserve fund established in terms of section 39;

            "subscription share" means a share which-

     (a)     is paid for by periodical contributions;

     (b)     is calculated to mature at the expiry of a period of not less than three years; and

     (c)     may not be redeemed before the expiry of the maturity period.

3.       Application

            (1) The provisions of this Act shall apply to every building society.

            (2) For the purposes of this Act the expression "building society" means an association of persons-

     (a)     whose name or title contains the words "building society" or;

     (b)     whose principal object is raising money by issuing shares to its members and by accepting deposits or loans from its members and others, and using such money to make advances to members and others upon the security of a mortgage or cession for the purpose of enabling the persons to whom such advances are to be made to acquire immovable property or to erect and maintain buildings upon immovable property,

but does not include a terminating society, that is to say, an association which by its rules has no power to accept deposits or to borrow money otherwise than from another section of the same society, and which is bound to terminate on the expiry of a fixed period or upon the occurrence of an event specified, or the rules of which provide for the organization of its members in sections, for the separate administration of the affairs of each section or the joint administration of the affairs of all sections and for the termination of each section upon the expiry of a fixed period or upon the occurrence of an event specified in the rules.

4.       Name of terminating society

            (1) No terminating society shall carry on business in Botswana unless the word "terminating" forms part of its name or title.

            (2) Any society which contravenes the provisions of subsection (1) shall be guilty of an offence and liable to a fine not exceeding P1000.