The main object of the Credit Information Bill, (the “Bill”) published on 11 June 2021, is to provide for the regulation of the credit reporting system, the licensing and supervision of credit bureaus by the Bank of Botswana (the “Bank”).
Under the Bill, a credit bureau is defined as a company licensed to collect credit reports and process information on the credit status of a data subject (an individual or business entity whose data is collected, processed and disclosed to third parties in the credit information sharing system).
The Bill has numerous provisions and can be categorized with the following main sub-headings: Licensing of Credit Bureaus, Governance, Regulation and Supervision of Credit Bureaus, Obligations of Data Providers and Data Users, Rights of Data Subjects Relating to Consumer Information, and Investigation of Complaints.
Licensing of Credit Bureaus
Licensing of a credit bureau (application for a license, validity, variation, rejection, surrender, transfer suspension and revocation of a license) will be regulated by the Bank, as well as the establishment and maintenance of a register of credit bureaus, access of the register by data providers and how consumer information must be handled by a credit bureau once its license has been revoked.
Governance, Regulation and Supervision of Credit Bureaus
This part provides for the governance, regulation and supervision of credit bureaus, and further makes provision for the following;
- the prohibition to acquire shares or a beneficial interest in a credit bureau without the prior approval of the Bank;
- grounds of disqualification for the appointment of a director or senior management officer of a credit bureau with regard to the collection and disclosure of consumer information on data subjects;
- credit bureaus taking appropriate measures to safe guard consumer information against unauthorised access;
- the retention of consumer information and the steps to be taken by a credit bureau to ensure credibility of the consumer information;
- data providers taking reasonable steps to ensure the accuracy and completeness of data provided by it to a credit bureau;
- directions to be taken by the Bank on issues of inaccurate, incomplete and/or outdated consumer information; and
- actions to be taken by the Bank against a credit bureau for non-compliance;
Obligations of Data Providers and Data Users
Data providers and data users will be required to carry out the following;
- data providers will be required to provide all positive and adverse consumer information in respect of a data subject;
- data providers will be required to ensure that consumer information provided to a credit bureau is accurate, complete and is provided in a manner that ensures the integrity of the information; and
- data users will be required to access information for the purposes provided for in the Bill.
Rights of Data Subjects Relating to Consumer Information
This part provides for the rights of data subjects relating to consumer information kept and maintained by a credit bureau, the notification of adverse actions and the right to challenge consumer information.
Investigation of Complaints
The Bank may investigate a complaint on its own initiative, or upon receipt of a complaint from a complainant. Provision is also made for the Bank’s refusal to investigate or discontinue a complaint, and the continuation of an investigation by the Bank where a complaint has been withdrawn.
Currently, credit bureaus remain unregulated, and once the provisions of this Bill are promogulated into law, it shall become a regulated sector.
For any further information, please feel free to contact One Seikano at one@bookbinderlaw.co.bw or +267 391 2397.