Our Ref:
Your ref: NAS/11/2/7 CONF
November 2, 2022
The Office of the Clerk,
National Assembly of Zambia
Parliament Buildings
Lusaka
Dear Sirs,
The Planning and Budgeting Committee – Consideration of the Zambia Institute of Banking
and Financial Services Bill, N.A.B. No. 22 of 2002
Your letter dated October 26, 2022 on the captioned subject matter refers. Thank you sincerely for
requesting we submit on the ramifications of this Bill. We regret the delay in providing our written
comments.
We support the regulation of the banking and financial service practitioners. Such professionals hold
extremely sensitive positions in the stability of the country’s financial system. We therefore support
the Bill in principle. However, there are some details within the Bill that, in our view, need further
consideration before it can be enacted. Principal among these issues is the definition of “practitioner”
in the Bill. That definition is the very foundation of all the regulatory provisions. It is a fact that
banking and financial services are performed by various professionals, many of whom are already
heavily regulated under other pieces of legislation. The Act must not apply to such professionals.
Our other comments are on governance, procedures, and ambiguities under the Act. We also
expressed deep concern about the trend of creating “Inspectorates” under legislation for the
regulation of professions. We concluded by highlighting the fact that such a sensitive institution
should never have the ability to, “accept monies by way of grants or donations from any source in or
outside the Republic” without oversight. We recommended that the Minister provide such oversight.
We confirm that we shall make oral presentations of these submissions at the appointed time and
place of Thursday November 3, 2022 at 10.50 hours, at the Fwanyanga Mulikita Committee Room at
Parliament Buildings.
Kindly acknowledge safe receipt of this letter and the enclosed submissions.
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Yours faithfully,
ZAMBIA FEDERATION OF EMPLOYERS
Harrington Chibanda
EXECUTIVE DIRECTOR
Encl.
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PART CLAUSE COMMENT RECOMMENDATION
1. PART I
PRELIMINARY
PROVISIONS
CLAUSE 2 -
Interpretation
• Scope of the definition of “practitioner”:
“practitioner” means a person engaged in the core
banking and financial service operation as that
person’s main paid occupation, or possesses
knowledge, training or experience in the field of
banking or financial services, and is registered with a
valid certificate issued in accordance with this Act.
• This definition focuses on the individual’s “main paid
occupation”, in the “core banking and financial service
operation”. That definition is: “the main activities
relating to the conduct of a banking and financial
service which include customer acquisition, deposit
taking, withdrawal processing, digital payment,
treasury, loan and credit processing and any other
activity as the Minister may, by statutory instrument,
determine”.
• It is well known that several other professions are
involved in such work, such as legal practitioners and
accountants. These professions are already heavily
regulated under their respective statutes.
• These definitions form the entire
foundation of the Act as it seeks
to regulate such “practitioners”. It
is imperative to be clear that
those professions already
regulated should be expressly
excluded from the scope of this
Bill. Otherwise, there is a strong
risk of jurisdiction overlap or
contradiction, which will not be
easily resolved using the tools of
statutory interpretation.
• Consider the inclusion of a
section on “application”. It can
provide that this Act shall not
apply to professionals regulated
by other legislation, regardless of
whether they work in the banking
and financial services sector.
• No gap would result.
Professionals who misconduct
themselves are subject to internal
discipline by their employer, civil
and criminal proceedings, and
their own professional
regulations,
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PART CLAUSE COMMENT RECOMMENDATION
2. PART II
THE ZAMBIA
INSTITUTE OF
BANKING AND
FINANCIAL
SERVICES
CLAUSE 4:
Functions of
Institute
• Correct paragraph (a) of
subclause (1) from promoting the
profession and its “interest” to its
“interests”.
CLAUSE 5:
Constitution of
Institute
• Subclause (2) provides that the constitution “shall
regulate” the affairs of the Institute. Subclause (3)
provides a list of fundamental issues that should be so
regulated through the constitution, especially since it
is adopted by an absolute majority under subclause
(1). Clauses 6, 7 and 8 follow through by requiring
significant governance matters to be in accordance
with the constitution.
• Yet, subclause (3) provides that the constitution
“may” provide for such governance matters. There
should be no overall discretion. Paragraph (e) is a
sufficient window for discretion in its allowing “any
other matter as the membership may determine”.
• Replace “may” with “shall” under
the first line of subclause (3).
CLAUSE 8: Council
of Institute
• We recommend the inclusion of a
representative of the Bankers
Association of Zambia on the
Council. This may replace
paragraph (d) of subclause (2) (“a
representative of a bank”) and
promote unity in the banking
sector, rather than leaving them
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PART CLAUSE COMMENT RECOMMENDATION
to compete for the slot on the
Council.
• Increase the disqualification
under subclause (3)(a) from one
year to five years. One year after
being found guilty of professional
misconduct it not enough time for
“reformation”.
• Specify, e.g. five years since
conviction under paragraph (f) of
subclause (3). If an individual can
return to public office after five
years from a conviction under
section 49 of the Anti-Corruption
Act No. 3 of 2012, it is a period
that ought to be replicated
throughout the law for
consistency and in recognition
that it is a sufficient period for
reformation. In fact, section 49
expressly supports
“reintegration” and clause 15 of
this Bill implicitly does so as well.
CLAUSE 9:
Functions of
Council
• Subclause (1) provides that the Council performs
“executive functions”, followed by a list of corporate
governance functions under subclause (2).
• Replace “perform the executive
functions of the Institute” under
subclause (1) with “provide
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PART CLAUSE COMMENT RECOMMENDATION
• The Council is effectively the Board of the Institute.
Boards should never perform “executive functions”.
The “delegation of functions” under clause 10 does not
remedy the anomaly.
strategic direction to the
Institute”.
CLAUSE 11:
Registrar and other
staff
• Clause 11(2) requires the Registrar to be a
“practitioner” to whom the Act will apply. As
subclause (1) makes clear, the Registrar is an
administrator. It is therefore more important for them
to have skills in management or business, rather than
banking and financial services.
• Remove the requirement for the
Registrar to be a banking and
financial services practitioner.
Some criteria for appointment is
useful, but it needs to be more
relevant to the administrative
nature of the position.
3. PART III
REGISTRATION
OF
PRACTITIONERS
AND ISSUANCE
OF PRACTISING
CERTIFICATES
CLAUSES 12, 13, 14
and 15: Eligibility to
register and
practice as a
“practitioner”
• We reiterate our comments in relation to the
definition of “practitioner” under clause 2. These
clauses make no exception for professionals already
regulated under other pieces of legislation such as the
Legal Practitioners’ Act, Cap 30, or the Accountants
Act No. 13 of 2008, or any other statute under which
the particular individual may already be regulated.
• Amend the definition of
“practitioner” under clause 2.
• Include regulation under other
legislation as a ground upon
which registration is not required
under this Act. This could be by
amending Part III, or the addition
of an “application” section under
Part I to provide that the Act shall
not apply to professions
regulated by other laws.
CLAUSE 18:
Suspension and
cancellation of
registration
• Paragraph (c) of subclause (1) provides that
conviction of an offence “under any written law” is
enough for the Institute to suspend or cancel the
• Amend paragraph (c) of
subclause (1) to specify that the
conviction should be of an offense
involving fraud or dishonesty, or
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PART CLAUSE COMMENT RECOMMENDATION
registration of a practitioner if the sentence exceeds
six months’ imprisonment without the option of a fine.
• The problem with this extremely broad provision is
that it applies even if the conviction has no connection
whatsoever to banking and financial services. The
requirement that the practitioner should be given a
hearing first (subclause (2)) is, realistically, of little
effect because they will probably already be
incarcerated.
• The regulation of a profession should be restricted to
what directly affects that profession. That is why
subclause (3)(f) of clause 8 only disqualifies
practitioners who have been convicted of offenses
involving fraud or dishonesty from standing as
Council members. It is strange that the
disqualification to be a Council member is less
stringent than to be a registered “practitioner”.
any offense under the Act. The
option of a fine (or lack thereof) is
secondary to the nature of the
offense. As with our
recommendation in relation to
clause 8, such conviction should
have been within a period of five
years from date of registration.
CLAUSE 19: Reregistration
• There appears to be a contradiction between
subclause (4) of clause 18 and clause 19. Clause 18(4)
provides that re-registration can only be, “on
conditions that may be prescribed.” Conversely, clause
19 provides that re-registration would be subject to,
“the terms and conditions that the Institute may
determine.”
• There is an inherent conflict of interest in allowing the
Institute to determine who to allow back into the
profession. It is why, for instance, it is the Chief Justice
• Delete subclause (4) of clause 18.
• Amend clause 19 to provide that
re-registration shall be in
accordance with conditions to be
prescribed.
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PART CLAUSE COMMENT RECOMMENDATION
who decides whether an expelled legal practitioner
will be admitted back to the Bar and not the legal
fraternity.
CLAUSE 23:
Suspension and
cancellation of
practicing
certificate
• Paragraph (b) of subclause (1) refers to conviction
and imprisonment for more than six months without
the option of a fine.
• We reiterate our
recommendation in relation to
clause 18 and that the conviction
should be of an offense involving
fraud, dishonesty, or the Act.
4. PART IV
DISCIPLINARY
MATTERS
CLAUSE 34:
Professional
Conduct Committee
• There is no minimum period of experience for any of
the members of the Committee.
• Committee members should have
at least five years’ experience
in their respective professions.
The PCC is the gateway to the
Disciplinary Committee and has
significant powers of its own
under clause 38. Greater care
should be taken in its
composition, in the same way the
composition of the Disciplinary
Committee under clause 39 was
done with care.
CLAUSE 36:
Functions of
Professional
Conduct Committee
• The word “advise” under subclause (4) is
grammatically incorrect.
• Correct the word to “advice”.
CLAUSE 37:
Proceedings of
• Subclause (2) provides that three members shall form
a quorum. This should be read with clause 34(1),
• The quorum must at all times
include the legal practitioner. If
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PART CLAUSE COMMENT RECOMMENDATION
Professional
Conduct Committee
which provides that the PCC shall be constituted by
four practitioners and one legal practitioner.
that is considered impractical, the
composition under clause 34 can
be rebalanced to have two legal
practitioners while the quorum of
three PCC members is
maintained, with at least one
being a legal practitioner.
CLAUSE 38:
Sanctions for
practitioners by
Professional
Conduct Committee
• The decision of the PCC must be
in the same form as that of the
Disciplinary Committee under
clause 41, i.e. a reasoned decision
or determination, in writing. That
will support the option of an
appeal under clause 49(1).
CLAUSE 39:
Disciplinary
Committee
• Similar to clause 34 and the Professional Conduct
Committee, the Council constitutes the Disciplinary
Committee. However, unlike clause 34, there is no
provision under clause 39 for the legal practitioners to
be nominated by the Law Association of Zambia.
• Amend the provision to include
that the legal practitioners shall
be nominated by the Law
Association of Zambia. Otherwise,
it would appear as though the
Council can choose which legal
practitioners on its own.
• Paragraph (d) of subclause (3)
appears to be a duplication of
paragraph (c) of subclause (1) in
terms of the ten years’
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PART CLAUSE COMMENT RECOMMENDATION
experience. Reconcile the
duplication.
CLAUSE 41:
Proceedings of
Disciplinary
Committee
• Replace “judgment” with
“determination” or “decision”
under subclause (7). The
Disciplinary Committee is not a
Court. The term “decision” is used
under clause 49(2). Consistency
should be maintained.
5. PART V
INSPECTORATE
CLAUSE 47: Power
of entry, search and
inspection
• We are deeply concerned by the “arming” of
professional regulators with Inspectorates and
powers of entry, search and inspection. This is an
alarming trend in all professional regulation statutes
being enacted now.
• It is, in our view, complete and unjustified overregulation.
We have already received several
complaints from employers about such professional
“Inspectorates” harassing them and purporting to
exercise powers they do not possess. Such
“Inspectorates” seem to have failed to understand that
their role is not to regulate the sector in question, but
the professionals who fall within their jurisdiction. It
appears that the restriction of some powers to
warrant from a Court has had little effect in curbing
such abuse.
• Delete Part V. Find more
appropriate ways of regulating
professionals that does not give
powers that should be reserved
for law enforcement agencies
established by the Republican
Constitution.
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PART CLAUSE COMMENT RECOMMENDATION
• Additionally, the powers granted to “Inspectorates”
create yet another opportunity for fraudsters. As
much as such statutory provisions make
impersonation an offense and require the provision of
identity cards, some imposters are so sophisticated
that they can easily convince unsuspecting targets of
their apparent genuineness. It happens with
Government Departments on a regular basis, and will
not doubt soon spread to professional “Inspectorates”
as well, if it has not already done so.
• The banking and financial services sector is already
heavily regulated by the Bank of Zambia and the many
other financial sector law enforcement agencies.
These are all directly part of the Central Government.
They are not “private members’ clubs” of particular
professionals.
• The Bank of Zambia therefore has the mandate to
conduct inspections, searches, etc. In the process of its
doing so, it can verify whether the professionals
employed in the provision of banking and financial
services are appropriately registered and have annual
practicing certificates issued by the ZIBFS. A separate
“Inspectorate” is not necessary for ZIBFS, or any other
professional regulator.
• This legislative trend needs to end as it has a severely
negative impact on the ease of doing business. The
strong penalties of up to 500, 000.00 penalty units
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PART CLAUSE COMMENT RECOMMENDATION
under the Bill and the power to issue administrative
penalties under clause 52 are sufficient deterrents to
non-compliance with the Bill.
6. PART VI
GENERAL
PROVISIONS
CLAUSE 49: Appeals • An appeal from a decision of the Disciplinary
Committee under subclause (2) does not have a
limitation period. This is anomalous for two reasons:
o all of the other appeals under the clause have
limitation periods; and
o subclause (3) provides that a decision of the
Disciplinary Committee will not take effect,
“until the expiration of the time for lodging an
appeal.”
• Provide a definitive limitation
period. Since thirty days is used
for the other forms of appeal,
thirty days is recommended for
subclause (2) as well.
7. FIRST SCHEDULE PART II: Financial
Provisions
• Paragraph 7(2) allows the Institute to, “accept monies
by way of grants or donations from any source in or
outside the Republic.” There is no oversight of this
ability.
• The lack of oversight in the receipt of donations “from
any source” for a professional regulator integral to the
stability of the country’s financial system is
dangerous.
• Donations and grants must be
approved by the Minister.