17.     Powers of society

            (1) Subject to the provisions of this Act a society shall have the following powers-

     (a)     to acquire or retain the ownership of land or the lease of land and to erect buildings thereon primarily required for the administration of the society's affairs, and from time to time to alienate such land or terminate or cede such lease and acquire or hire other or further land for like purposes, and to let such portion of the buildings in which the business of the society is carried on as may not be required for the purposes of the society:

                      Provided that the total value of land acquired and buildings erected shall not, without the consent in writing of the Registrar, exceed an amount equal to 20 per cent of its permanent share capital and the amount standing to the credit of its statutory reserve fund and general reserve fund;

     (b)     to buy immovable property mortgaged to the society or acquire leases of land ceded to the society in security for debt and to hold such immovable property or leases for a period which shall not exceed five years without the authority of the Registrar;

     (c)     to receive savings deposits;

     (d)     to receive fixed deposits;

     (e)     to borrow money at interest other than in the form of deposits, from a bank, or if the terms are approved in writing by the Registrar from any person other than a banker, and to arrange overdraft facilities with a bank approved by the Registrar;

     (f)      from time to time to issue shares of such classes and denominations, with or without accumulating dividends, and with such preferential rights regarding dividends and capital, and subject to such conditions of transfer and re-payment as may be decided by the society in accordance with its rules;

     (g)     to hold cash and to make deposits-

           (i)       with a bank approved by the Registrar; and

          (ii)       with the Botswana Savings Bank approved by the Registrar;

     (h)     to lend or advance money at interest to members and others on the security of mortgages or cessions, and to negotiate the purchase or sale and the hiring or letting by members or others of immovable property mortgaged or to be mortgaged to the society;

     (i)      to lend money to members and others on the security of their deposits and to members on the security of their shares;

     (j)      to invest in such bills, bonds, certificates, debentures, stock or municipal loans as may be approved by the President;

     (k)     to act as the agent of insurance companies in effecting insurances in respect of property mortgaged or to be mortgaged to the society and any other insurances designed to secure a debt to the society and to collect on behalf of such companies the premiums in respect of any insurances pledged to the society;

     (l)      to pay pensions or gratuities to its employees, or to establish a pension fund or to adopt a pension scheme for providing pensions or gratuities for its employees, or to join with other societies in establishing or adopting any such fund or pension scheme;

     (m)    to do all lawful things incidental or conducive to the powers conferred upon it in terms of this section;

     (n)     to undertake such other business as may be prescribed.

            (2) A society shall not undertake any business other than that authorized by this section, and in particular shall not enter into any contract (other than a contract for the allotment of shares in terms of subsection (1)(f), or for the receipt of money on deposit or loan in terms of subsection (1)(c), (d) or (e)) whereby, in return for one or more sums of money paid to the society, the society agrees to pay a sum of money at a future date or a series of sums of money at future dates.

18.     Minors and married women may be members of society

            Unless otherwise provided by the rules of the society, a minor over the age of 16 years or a married woman whether under marital power or not may be a member or depositor of any society and may without assistance execute all necessary documents, give all necessary acquittances and enjoy all the privileges (except that a minor shall not hold office) and be liable to all the obligations attaching to members or depositors.

19.     Conditions in regard to savings deposits and fixed deposits

            No society shall-

     (a)     issue any form of application to make savings deposits which does not contain a printed reference to this section;

     (b)     issue any form of application to make a fixed deposit which does not contain a printed reference to this section;

     (c)     accept a deposit from any person unless such person has signed a form of application to make deposits with such society;

     (d)     accept any deposit except as a savings deposit or as a fixed deposit;

     (e)     accept any deposit as a fixed deposit for a period which is less than 12 months or more than five years:

                      Provided that the directors in their discretion may authorize the withdrawal of a fixed deposit before its due date;

     (f)      allow any savings deposit to be withdrawn except after due notice given in accordance with its rules;

     (g)     allow any deposit to be withdrawn by cheque, draft or order payable on demand;

     (h)     allow a notice of withdrawal of a savings deposit to run concurrently with a notice of withdrawal which was previously given.

20.     Maximum savings deposit or fixed deposit by individual

            Except with the written consent of the Registrar and subject to such conditions as he may determine, no society shall, in relation to its total assets as severally set out in the first column of the First Schedule to this Act, allow any person-

     (a)     to maintain a credit balance in his savings deposit account in excess of the amount set out in the second column of the said Schedule; or

     (b)     to hold fixed deposits which exceed in the aggregate, exclusive of interest, 12 times the amount set out in the third column of the said Schedule or which fall due for repayment in any one month in an amount which exceeds, exclusive of interest, the amount set out in the said third column.

21.     Saving in the case of deposits by a trustee

            Notwithstanding the provisions of section 20 a society may accept deposits from a trustee for different trusts which exceed in the aggregate the limits specified in that section if the amount deposited in respect of each individual trust does not exceed such limits.

22.     Conditions relating to shares

            No society shall-

     (a)     issue any prospectus relating to its shares unless such prospectus is printed in English and states-

           (i)       the names of the directors of the society,

          (ii)       the classes of shares issued or to be issued by the society, the conditions of redemption or re-payment thereof and the preferential and other special rights attaching thereto; and

          (iii)       the provisions of section 69;

     (b)     issue any form of application for shares unless there is firmly attached to such form a prospectus which is in accordance with the provisions of paragraph (a);

     (c)     accept any person as a member unless he has signed a form of application for shares in the society;

     (d)     issue any shares other than permanent shares, fixed-period shares or subscription shares;

     (e)     issue any permanent share or fixed-period share unless it is paid for in full when the application for such share is accepted;

     (f)      issue any share at a value other than its nominal or face value;

     (g)     pay dividends on shares except out of profits which are available after provision for the statutory reserve fund has been made in accordance with the provisions of section 39.

23.     Maximum shareholding by individual

            No society shall, except with the written consent of the Registrar and subject to such conditions as he may determine, allow any one person to hold fixed-period or subscription shares in excess of the amount set out in the second column of the Second Schedule in relation to the society's total assets as severally set out in the first column of the said Schedule.

24.     Society may redeem share in certain circumstances

            Notwithstanding anything contained in this Act a society may redeem any share-

     (a)     at any time if the owner and the society agree to the redemption;

     (b)     in the event of the death or insolvency of the holder thereof if the executor or trustee, as the case may be, consents thereto.

25.     Advances must be reducible or fixed-term advances

            (1) No society shall, on the security of a mortgage or cession, make any advance other than a reducible advance or a fixed-term advance.

            (2) The terms of a reducible advance shall provide for the annual reduction of the capital amount outstanding and for the repayment of the total capital amount within a period of not more than 30 years.

            (3) If any portion of the capital amount advanced has been repaid to the society and the society has re-advanced an amount equal to the portion so repaid, the capital amount of the original advance still outstanding and the amount so re-advanced shall be repaid within a period of not more than 30 years calculated from the date of the original advance.

            (4) The terms of a fixed-term advance shall provide that the capital amount advanced shall be due for repayment within a period of not more than five and one half years.

            (5) The aggregate amount of fixed-term advances shall at no time exceed 10 per cent of the total amount of all advances made by a society on the security of mortgages and cessions.

26.     Limit as to amount of advance

            (1) Subject to the provisions of subsection (2), no society shall, on the security of a mortgage or cession, make an advance in excess of 75 per cent of the value of the property mortgaged or the lease ceded as determined at the time of making the advance:

            Provided that in respect of property which was mortgaged to a society and which has been purchased by the society owing to the default of the debtor or which has been sold in execution or upon insolvency or under the authority of the debtor granted subsequent to his default under a registered mortgage bond, a society may make a reducible advance to a purchaser on the security of a mortgage in an amount not exceeding the amount due to the society by the previous owner at the time of sale and previously secured by the mortgage of the said property.

            (2) A society may in conjunction with an advance made on the security of a mortgage or cession, make an additional advance against collateral security on such terms and conditions as may be determined by the Registrar.

27.     President may guarantee repayment of advances

            (1) The President may, on such terms and conditions as he may determine, guarantee the repayment of advances made by a society on the security of a mortgage or cession.

            (2) Any guarantee given in terms of this section shall be deemed to be collateral security for the purposes of section 26(2).

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

            The total amount of any advance and of any additional advance of which the President has guaranteed repayment in terms of section 27 shall not exceed in any individual case 90 per cent of the value of the property mortgaged or the lease ceded as determined at the time of making the advance.

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

            No society shall issue any advertisement, notice or other similar document relating to its advances unless such advertisement, notice or document contains a clear statement as to whether the interest on its advances is calculated on the monthly, quarterly, half-yearly or annual balance, as the case may be.

30.     Advance on property already mortgaged prohibited

            No society shall advance money on the security of immovable property which is subject to an existing mortgage bond unless such existing mortgage bond is in favour of the society.

31.     Society may make further advances for certain purposes

            Notwithstanding the provisions of sections 26 and 28, a society may for the purpose of protecting immovable property mortgaged or a lease ceded to it for the purpose of maintaining its security for the repayment of an advance, make further advances in respect of-

     (a)     premiums on insurance policies designed to provide further security for the repayment of an advance;

     (b)     rates and taxes in respect of the said immovable property;

     (c)     the maintenance and repair of the said immovable property;

     (d)     the installation of sewerage on the said immovable property.

32.     Limitation as to sum total of advances

            (1) The sum total of all advances on each of which there is owing to the society an aggregate amount in excess of P10 000 shall at no time exceed the percentage set out in the second column of the Third Schedule in relation in each case to the total assets of the society as severally set out in the first column of that Schedule.

            (2) The Minister may, by order published in the Gazette, amend the Third Schedule.

33.     Valuation of property for purposes of advance

            (1) No society shall make any advance unless it is based upon a valuation made in accordance with the provisions of subsections (2), (3) and (4) by a person (hereinafter called a "valuator") appointed by the society for the purpose.

            (2) Every valuator shall make a personal inspection of the immovable property concerned:

            Provided that a valuator shall not be required to make such inspection in the case of vacant land with which he is personally acquainted.

            (3) Every valuator shall record his valuation and the date of his inspection on a prescribed form and shall sign such form.

            (4) In the case of immovable property which is acquired by purchase not more than six months before the date of valuation, the valuation shall not exceed the true purchase price of such property as declared by the parties concerned for transfer duty purposes by more than P100 unless the board of directors of the society resolves that in its opinion on the information furnished to it a stipulated valuation in excess of such purchase price is reasonably justified.

34.     Valuator must have no pecuniary interest in advance

            (1) No society shall appoint as valuator, in terms of section 33(1), any person who has any direct or indirect pecuniary interest other than the payment of fees for professional or legal services in the granting of an advance.

            (2) No person shall make any valuation for the purposes of section 33(1), if he has any direct or indirect pecuniary interest other than the payment of fees for professional or legal services in the granting of an advance, or if he is related within the third degree of consanguinity or affinity to any person having such an interest in the granting of an advance.

            (3) Any society which or person who contravenes the provisions of this section shall be guilty of an offence and liable to a fine not exceeding P1000.

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

            (1) Every director, local director or member of a local committee of a society who has any direct or indirect pecuniary interest in the granting of an advance shall declare the nature and extent of such interest at any meeting of the directors, local directors or local committee of the society where the granting of such advance or the valuation of any property offered as security for such advance is considered.

            (2) No such director, local director or committee member shall take part in the discussion at such meeting or exercise his vote thereon.

            (3) Any person who contravenes any of the provisions of this section shall be guilty of an offence and liable to a fine not exceeding P1000.

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

            A society may obtain judgment for and recover any amount disbursed by it on behalf of any person to whom it has made an advance on the security of a mortgage or cession in respect of-

     (a)     premiums on insurance policies designed to provide further security for the repayment of the advance;

     (b)     rates, taxes and fees in respect of the immovable property which has been mortgaged or the lease of which has been ceded;

     (c)     the maintenance and repair of the said immovable property; and

     (d)     the installation of sewerage on the said immovable property,

in addition to the amounts which it would be entitled to obtain judgment for and recover under such mortgage or cession.

37.     Registrar may examine books of society

            (1) The Registrar may at any time call for any documents and any other information relating to advances made by a society and at any time, personally or through a person designated by him, examine any books or documents relating to the advances made by a society.

            (2) The provisions of section 58 shall apply mutatis mutandis in regard to any such examination.

38.     Non-compliance with Act does not invalidate advance

            No advance or loan made by a society shall be invalidated by reason only of the fact that the society or any officer of the society has, in connection with such advance or loan, contravened or failed to comply with any provision of this Act.

39.     Establishment of statutory reserve fund

            (1) Every society shall establish a fund to be known as the statutory reserve fund.

            (2) Subject to the provisions of subsection (3) a society shall at the end of each financial year pay into the statutory reserve fund an amount which shall not be less than 10 per cent of its ascertained net profits.

            (3) If and so long as the amount standing to the credit of the statutory reserve fund is equal to or more than 10 per cent of the sum of the society's total liabilities to depositors and in respect of loans and overdrafts received and the paid up share capital of the society, the society shall not be obliged to make the payment referred to in subsection (2).

            (4) No dividend bonus or donation shall be paid out of the statutory reserve fund.

            (5) Moneys standing to the credit of the statutory reserve fund shall be invested in approved investments or any loans or advances to members or others on the security of mortgages or cessions in terms of section 17(1)(h).

            (6) A society may charge against the statutory reserve fund any net loss remaining to the society in any year after applying to such loss any undistributed profits brought forward from previous years.

40.     Restriction on pledging of investments and mortgages

            (1) A society shall not pledge any approved investment as security for a loan or overdraft unless it holds in cash or on authorized deposit or in approved investments, sufficient assets, excluding the investment so pledged, to enable it to comply with the requirements of section 42.

            (2) A society shall not pledge any mortgage as security for a loan or overdraft unless it holds sufficient unencumbered assets in cash, or on authorized deposit, or in approved investments, or in mortgages to cover the total amount of its liabilities as set out in section 42(1) including any amount received on the security of such pledge.

41.     Restriction on borrowings

            (1) Subject to the provisions of this section, a society shall not accept any money on deposit or borrow any money by way of loan or bank overdraft if-

     (a)     the sum of its permanent share capital and the amount of its statutory reserve fund and general reserve fund is or would by so doing be less than one quarter of the sum of its liability for deposits, loans and bank overdrafts and the paid up value of its other classes of shares; or

     (b)     its total paid-up share capital is or would by so doing be less than 40 per cent of the total amount of its liability for deposits, loans and overdrafts.

            (2) For the purposes of subsection (1)(b) the amount of the paid-up share capital shall be deemed to be reduced by the aggregate amount owing to the society on loans made against the security of shares in the society:

            Provided that in any case where an advance made by the society is secured by a mortgage or by a cession in addition to a pledge of shares in the society, the amount of the paid-up share capital shall be deemed to be reduced only by the amount by which the advance exceeds 75 per cent of the value of the property which is mortgaged or of the lease which is ceded, as the case may be.

            (3) Of the paid-up share capital taken into account for the purposes of subsection (1)(b) not less than three quarters shall consist of permanent share capital.

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

            (1) Subject to the provisions of this section, every society shall, after making provision to meet its liabilities other than those mentioned in this section, from day to day hold an amount in cash or on authorized deposit or in approved investments as security for the prompt repayment of fixed-period and subscription shares and of deposits, loans and overdrafts and for the payment of interest accrued thereon.

            (2) Such amount shall not be less than the sum of the following amounts-

     (a)     an amount equal to 30 per cent of the aggregate amount of its liabilities in respect of-

           (i)       savings deposits;

          (ii)       unsecured bank loans and overdrafts;

          (iii)       other loans to the extent to which the lenders may demand repayment within a period of one year;

         (iv)       interest accrued on all loans and deposits;

     (b)     an amount equal to 20 per cent of the aggregate amount of its liabilities in respect of-

           (i)       fixed deposits,

          (ii)       subscription shares issued for a period of not more than five years and fixed-period shares;

          (iii)       loans to the extent to which lenders may demand repayment within a period of five years but excluding any amount which has been taken into account in computing its liabilities in respect of such loans in accordance with paragraph (a):

                      Provided that where deposits or fixed-period shares have been pledged to the society as security for advances made by the society, the liabilities of the society as calculated for the purposes of this paragraph shall be reduced by the amount of the deposits or fixed-period shares which at any time remain pledged to the society;

     (c)     an amount equal to 10 per cent of the aggregate amount of its liabilities in respect of-

           (i)       subscription shares issued for a period of more than five years and fixed-period shares,

          (ii)       loans other than any specified in paragraphs (a) and (b) and repayable after a period of five years:

                      Provided that where shares have been pledged against advances made by the society, the liabilities of the society as calculated for the purposes of this paragraph shall be reduced by the value of the shares which at any time remain pledged to the society;

     (d)     an amount equal to 30 per cent of the aggregate amount of its liabilities in respect of advances which the society has undertaken to make but which have not yet been made.

            (3) For the purposes of this section an approved investment shall be valued at the cost thereof to the society or the market value thereof, whichever is the lower.

            (4) The amount held by a society for the purposes of this section shall not include any moneys belonging to its statutory reserve fund.

            (5) A society shall not pledge or otherwise encumber any moneys, deposits or investments held for the purposes of this section: