Regulatory Alerts2011-01-01
Prescription of Notice Period and Early Settlement Penalties for Term Loans and Similar Credit Facilities
The Bank of Botswana has prescribed a mandatory 45-calendar-day written notice period for customers seeking early settlement of term loans and similar credit facilities. Banks are capped from levying more than 30 days' interest on the outstanding balance as an early repayment penalty, with pro-rata adjustments applied when shorter notice periods are accepted. These requirements apply retroactively to existing loan agreements, mandate explicit contractual disclosure and public awareness measures, and took effect on 1 April 2011.
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