BBS Bank customers are reminded that under the former Botswana Building Society Bank, shareholders of the former Botswana Building Society Bank were given the opportunity to purchase shares in the new BBS Bank Limited which came into existence on Thursday 26 April 2018. As a reminder, BBS Bank is the company that will submit a commercial banking license application to the Bank of Botswana in due course.
As communicated in the Conversion Statement, the change from Botswana Building Society to BBS Bank means that Paid Up, Subscription and Indefinite Period Shares no longer exist. The three products are now term deposits whose accounts are referred to as Fixed Period Deposit, Subscription Deposit and Indefinite Period Deposit. Therefore, shares bought under BBS Bank will be listed with the Botswana Stock Exchange, on the Serala Over The Counter Board (OTC). This change means that withholding tax will now be levied on interest received on these deposit accounts instead of on dividends, which was applicable on the defunct share accounts.
Tax will now be applied on the deposit accounts as follows:
- Interest on the Subscription Deposit product will no longer be tax exempt.
- Therefore, the rate applicable on interest from Fixed Period Deposits, Indefinite Period Deposits and Subscription Deposits will be 10% compared to the previous 7.5%.
All the above deposit accounts will only be tax exempt for the first P7, 800 of interest earned. Nonetheless, features of all the redeemed share products shall remain unchanged. Should you require any clarity on the above, please contact the BBS Bank Call Centre on 3631551 or 3631596.
