Departments

Mandate

The mandate of the Department of Financial Markets is to manage the country’s reserves and develop domestic money and capital markets. The Central Bank of Lesotho (the Bank) through the Department promotes the development of financial markets in Lesotho through managing official foreign reserves, implementation of monetary policy through Open Market Operations, and contracting and managing the Government’s domestic debt through issuance and redemption of Treasury Securities. Recent establishment of Maseru Securities Market trading platform will go a long way in deepening the market and enhancing secondary market activities.

Divisions

The Department consists of FOUR (4) Divisions namely; Reserves and Market Operations, Market Risk and Development Division, Domestic Market Division, and Treasury Operations Division.

Reserves and Market Operations Division

Through the Department of Financial Markets, the Bank is mandated by section 6 (f), of the Central Bank of Lesotho Act of 2000 to own, hold and manage its official international reserves. The primary motive of the Bank for holding reserves is to maintain the value of the Loti (LSL) and to be in a position to settle the country’s international obligations promptly.

The functions of the Division include the following:

• To undertake securities’ auctions to support monetary policy operations.
• To coordinate all trading and other related activities on the trading floor and provide support to broking and dealing clients; and
• To Maintain and manage the foreign exchange reserves at adequate levels to facilitate the foreign transactions for Lesotho;

Market Risk and Development Division

The functions of the Division include the following:

• To initiate and manage developmental projects to domestic financial markets.
• To monitor the risk exposure of reserves against set risk parameters in line with the Bank risk tolerance; and
• To prepare and monitor strategies for portfolio management;
• To provide analytical support to reserves management function in order to meet the objectives of holding of reserves;

Domestic Market Division

The functions of the Division include the following:

• To promote investor education and public awareness.
• To ensure proper conduct of all licensed persons and market institutions/intermediaries; and
• To protect investor interests;
• To implement regional and international standards and best practice in securities markets and securities regulation;
• To create, maintain and regulate, through implementation of a system in which the market participants are self-regulatory to the maximum practicable extent, of a market in which securities can be issued and traded in an orderly, fair and efficient manner;
• To register prospectuses and other offering documents under which securities are offered to the public and listed on the exchange;
• To promote the issuance of the capital market products (bonds, shares etc);
• To promote development of all aspects of the capital markets through research on new products and institutions, with particular emphasis on the removal of impediments to, and the creation of incentives for, long term investments in productive enterprise;

Treasury Operations Division

The functions of the Division include the following:

• Confirmation, Settlement and Accounting of foreign deals as initiated by front office;
• Settlement and accounting of domestic securities issued in support of the monetary and fiscal policy;
• Processing of foreign currency denominated payments and receipts for the Bank and Lesotho government;
• Management of Correspondent banking relationships as maintained for holding international reserves;
• Confirmation, Settlement and Accounting of foreign deals as initiated by front office;
• Settlement and accounting of domestic securities issued in support of the monetary and fiscal policy;
• Processing of foreign currency denominated payments and receipts for the Bank and Lesotho government; and
• Management of Correspondent banking relationships as maintained for holding international

The Department of Research work is enshrined in the Central Bank of Lesotho Act No.2 of 2000. The Department implements the Bank’s function of:

1. Ensuring monetary stability pursuant to Sections 5 and 6 (c) & (d)
2. Being advisor to Government pursuant to Section 41 (3) (c) (i) & (ii)
3.  Producing reports on the state of the economy pursuant to Section 46 (1) & (2)

Key Functions

1. Pursuant to Sections 5 and 6 (c) & (d) the Department is responsible for the implementation of monetary policy which involves maintaining the peg between the Loti and the Rand. The Department is the Secretariat to the Monetary Policy Committee (MPC) of the Bank. The research and analysis that informs the monetary policy stance by the MPC is conducted by the Department.
2. Pursuant to Sections 41(3) and 46(1) the Department is responsible for conducting economic research and analysis and proffer advice to Government through submission of reports to the office of the Minister of Finance.
3. Pursuant to Section 46(2), the Department publishes the reports it produces through regular economic reviews and seminars.

Scope of Work

The work of the Department is therefore organized around the following activity clusters:

• Research & Analysis
• Reports & Publications
• Collection, Compilation &Dissemination of Statistics
• Projections & Forecasts
• Monetary Policy Operations
• Regional Integration Activities

Organization

The Department is organized into four Divisions supported by a Unit as follows:

• International Economics Division
• Statistics Division
• Studies & Analysis Division
• Modelling & Forecasting Division
• Knowledge Management Unit

Mandate

The mandate of the Department of Information Communication Technology is to enable operations of the Bank through provision of information technology based services required to facilitate the efficiency and effectiveness of the Bank’s business processes

Objectives

The objective of the Department is to support strategic direction of the Bank by enabling the Bank in its different functional areas through;

• Planning of Information Systems and Infrastructure required to support the strategic direction
• Delivery, Maintenance and support of information systems and infrastructure required to support the strategic direction
• Training on ICT Systems and Technologies

Divisions

The Department consists of four (4) Divisions namely; Enterprise Architecture and IT Governance, Business Solutions and Infrastructure and Operations.

Enterprise Architecture and IT Governance Division

The mandate of the division is to determine the information technology requirements of the various functional units of the Bank and to establish information technology roadmaps to best support the short-term, medium-term to long-term objectives of the Bank. The division is also mandated implement IT Governance and Service Management practices in order to ensure that ICT department delivers its services effectively, efficiently and in accordance with best practices in the field.
Functions of the Enterprise Architecture and IT Governance Division include the following:

• • To facilitate the planning of information technology solutions for the Bank through establishment of enterprise architectural roadmaps
  • To optimize the Banks business processes in order to enhance the overall efficiency of the Bank in carrying out its operations
  • To implement IT Governance and Service Management practices in order to ensure that ICT department delivers its services effectively, efficiently and in accordance with best practices in the field
  • To manage IT compliance to technology licensing requirements, general IT controls as well audit and risk management recommendations

Business Solutions Division

The mandate of the division is to execute projects for delivery of new or enhanced Information Technology based solutions required to support short-term, medium-term to long-term objectives of the Bank. The division is mandated to maintain and support the Information Technology based solutions of the Bank.

Functions of the Business Solutions Division include the following:

• • To undertake detailed analysis of business area requirements for planned information technology based solutions
  • To identify solutions to best address the requirements for planned information technology based solutions
  • To acquire, build, enhance and integrate Information Technology based solutions
  • To maintain and support the Information Technology based solutions
  • To provide training of end users on implemented Information Technology Based Solutions

Infrastructure and Operations Division

The mandate of the division is to establish new or enhanced networks, hardware and infrastructure components required to support short-term, medium-term to long-term objectives of the Bank. The division is also mandated to look after IT security infrastructures to protect the Bank’s environment and information.

Functions of the Infrastructure and Operations Division include the following:

• Establishment and maintenance of network and data communications infrastructure platforms necessary to host business applications;
• Establishment and maintenance of data center infrastructure technologies;
• Establishment and maintenance of network and infrastructure security solutions
• Establishment of disaster recovery and business continuity measures on hardware, networks and infrastructure;
• Provision of end-user training on desktop automation software solutions, collaboration and mobile software
• Operating the end-user support service desk

Information Security Services Division

The mandate of the Information Security Services Division (ISSD) is to, among others, execute and implement the Bank’s Information Security Policy and Cyber Security Framework. The overarching objective of ISSD is to protect the Bank’s information assets from loss, damage and misuse. ISSD protects the Bank’s Critical Information Infrastructure (CII) against any form of attack emanating from threats in the cyber space, in the quest to minimize cyber and information security risks the Bank faces. The ISSD ensures that the Confidentiality, Integrity and Availability (CIA) of the Bank’s CII is preserved, owned and controlled.

To achieve this, the ISSD pro-actively Identifies threats and consequently cyber and information security related risks parallel to the Bank’s risk management strategy, Protects the Bank through implementation of appropriate security safeguards, Detects in a timely manner any cyber and/or information security breaches, Responds to detected breaches leading to their Prevention and executes appropriate activities to Recover from any information and/or cyber security related incidents to maintain plans for resilience and to restore any capabilities or services impaired.

In conjunction with the above, the ISSD focuses on the following to promote cyber security resilience:

1. Combatting cyber crime
2. Providing cyber incident response

Securing the Bank’s CII

1. Providing cyber security governance
2. Promoting information sharing
3. Providing cyber awareness training and education within the Bank

Mandate

The mandate of the Central Bank of Lesotho (CBL) as spelled out under the Central Bank of Lesotho Act 2000 is to achieve and maintain price stability. The Act also provides the following objectives and functions that impact on the Lesotho financial system, from where the Department derives its mandate:

1. to foster the liquidity, solvency and proper functioning of a stable market-based financial system;
2. to formulate, adopt and execute the foreign exchange policy of Lesotho;
3. to license or register and supervise institutions pursuant to the Financial Institutions Act 1999, the Money Lenders Act 1989, the Building Finance Institutions Act 1976, and the Insurance Act 1976
4. to promote safe and sound development of the financial system; and
5. to monitor and regulate the capital market.

The Bank Supervision and Financial Stability Department is charged with the responsibility of safeguarding the overall soundness and stability of the financial system through the deployment of micro and macro-prudential supervisory instruments. This is achieved through the regulation and supervision of banking and other non-bank financial institutions in Lesotho, which entail developing appropriate laws, regulations and guidelines that govern the players in the banking sector; continuous review of the banking sector laws, regulations and guidelines to ensure that they remain relevant to the operating environment and are aligned to the international best practices; and contributing towards initiatives that promote financial inclusion.

Divisions

The Department is divided into three Divisions, namely:

• Banking Supervision Division;
• Financial Surveillance & Integrity Division; and
• Financial Stability Division.
• The Consumer Protection Unit is a shared service that serves the two Departments of Supervision.

The Department adopted a Risk Based Supervision (RBS) approach to supervision of licensed financial institutions since 2009. Under this approach, the CBL assesses the risk profile of each institution and ascertains the effectiveness of the systems and procedures to identify, measure, monitor and control risks. The approach seeks to promote competition, safety and soundness of the financial sector. It therefore, benefits institutions as regulatory efforts are more focused on high-risk areas and provides for more efficient supervision. The framework enables CBK to be more proactive and better positioned to pre-empt any serious threat to the stability of the financial system from current or emerging risks.

The Legal Instruments administered include:

• Financial Institutions Act 2012 and its implementing Regulations (about 20 regulations):
• Money Laundering and Proceeds of Crime Act, 2008 (As amended) and its implementing Regulations;
• Exchange Control Regulations 1989 and the Currency and Exchanges Manual for Authorised Dealers 2019;

Banking Supervision Division

The Banking Supervision Division is responsible for the supervision of banks in Lesotho and Large Financial Cooperatives licensed by the Central Bank of Lesotho. The Supervision function is discharged through off-site monitoring and on-site examinations. Off-site monitoring analyses financial statements, prudential and risk management reports submitted periodically to the Central Bank of Lesotho. The onsite examinations verify the accuracy and reliability of data and information submitted to CBL by the banks, including areas that cannot be readily assessed through prudential reports.

The functions of the Division include:

• To develop and implement an off-site surveillance system for banks that continuously monitors the financial health of banks;
• To prepare periodic reports on the financial soundness of and the review of compliance with laws and regulations by banks;
• To conduct examinations of banks to ensure effective regulatory and supervisory oversight of Banks;
• To verify accuracy of data submitted by banks to the CBL and provide feedback to the off-site information system;
• To prepare comprehensive reports of examination on financial condition, adequacy of risk management systems and internal controls, adequacy of Board and Senior Management oversight and Management Information Systems and extent of compliance with laws and regulations of examined banks;
• To follow-up banks’ compliance with directives and other corrective measures issued by the Commissioner;
• To recommend to the Commissioner possible course of action in handling problem banks;
• To arrange meetings with the Board, Management and Auditors of banks to discuss areas of concerns arising out of examinations and reports submitted to the CBL;
• To evaluate applications for mergers, acquisitions and change in ownership control of banks;
• To evaluate requests for branching, establishment of agencies and other extension offices of existing banks;
• To evaluate the suitability of new products and services to the domestic environment;
• Cooperate with other supervisory authorities in cases of cross border banking activities;

Financial Surveillance and Integrity Division

This Division is responsible for supervision of the Authorised Dealers in foreign exchange (ADs) to enforce compliance with Exchange Control and Anti Money Laundering and Combating of Financing of Terrorism (AML/CFT) Laws. The Division administers the delegated powers of the Minister of Finance on certain banks which have been appointed to act as ADs, which give them the right to buy and sell foreign exchange, subject to conditions and within prescribed limits. The Division also oversees compliance on Authorised Dealers in foreign exchange with limited authority (ADLAs) including Bureaux de Change, which deal in foreign exchange for the sole purpose of facilitating travel related transactions. The general objective for the Division is to create an enabling environment for trade and investment in Lesotho, by advising the Government on appropriate domestic policies to pursue, and to ensure that Lesotho does not become a safe haven for money laundering and by taking appropriate measures to combat it. The supervision function is discharged through offsite monitoring and onsite examinations, applying a risk based approach for the supervision of AML/CFT risks.

The functions of the Division include:

• To advise the Government of Lesotho through the Bank on appropriate domestic policies to implement and to ensure that an enabling environment in foreign exchange controls exists;
• To hold consultative meetings with data providers such as the Lesotho Revenue Authority (LRA), Authorized Dealers (ADs) and the exporting community, in order to ensure compliance to Exchange Control Regulations;
• To issue instructions to ADs whenever there are policy changes or adjustments;
• To process all foreign exchange applications submitted to the Central Bank, in terms of the Regulations;
• To monitor inflows and outflows of Foreign Exchange Transactions from the ADs and Authorised Dealers with Limited Authority (ADLAs) in order to ensure compliance with Exchange Control Laws;
• To compile statistics on Foreign Exchange Transactions for submission to the Research Department of the Central Bank and advice on policy direction;
• To process and analyze Exchange Control Declaration Forms F178;
• To monitor inflows of export proceeds to ensure compliance with the Regulations;
• To inspect the records of ADs and ADLAs to ensure compliance with Exchange Control Regulations and Guidelines;
• To monitor and analyse reports from banks to assess money-laundering risks;
• To conduct examinations of banks to ensure effective regulatory and supervisory oversight of Banks;
• To review AML/CFT regulations issued by the Commissioner and develop guidelines in line with international   best practice such as FATF recommendations; and
• To cooperate with other supervisory authorities in cases of cross border banking activities;

Financial Stability Division

The Division’s is responsible for safeguarding the entire financial sector system stability focusing on banking and non-banking financial institutions; disseminating information to policy makers, financial institutions and the general public about the possible risks to the financial system; providing recommendations on regulations and policies that may limit risks; and coordinating and participating in the resolution of financial institutions in an efficient and effective manner.

The functions of the Division include:

• Develop and implement macro-prudential policy;
• Conduct macro-prudential surveillance including stress tests in order to identify vulnerabilities and assess resilience of the financial system;
• Participate and coordinate issues relating to crisis management and financial safety-nets at national and cross-border level, which comprise enhanced supervision, emergency liquidity assistance recovery and resolution as well as deposit insurance systems;
• Prepare and publish periodic reports (i.e. financial stability reports) on the soundness of the financial system;
• Conduct research on pertinent and emerging macro-financial and financial stability issues;
• Serve as a secretariat for the Financial Stability Committee.

Financial Consumer Protection Unit

The FCP Unit was established in 2018 with the main objective of protecting the financial consumers from unfair, deceptive or abusive practices and taking action against FSPs that violate the financial consumer laws. The FCP Unit is responsible for supervising market conduct via on-site and off-site examinations (transparency and disclosure), complaints handling and redress, developing policy and legal framework, and engaging in financial education and literacy campaigns. The Unit supervises all financial institutions under the purview of the Central Bank of Lesotho.

The Unit’s functions include:

• On-site examination and off-site monitoring of financial consumer protection and market conduct issues;
• Monitors financial consumer complaints handled by the banking industry and other financial institutions, for identification of FCP risk factors;
• Investigates and facilitates the resolution of complaints lodged to the Central Bank when internal mechanisms of banks and other financial institutions had been exhausted;
• Participate and contribute to financial inclusion initiatives; and
• Participate and contribute to financial education and literacy initiatives.

This Department is charged with the responsibility to register, license and regulate non-banking financial institutions. The principal law – Central Bank of Lesotho Act provides the basic mandate and the execution of its various functions is undertaken through the industry specific acts and regulations. It comprises of the following three Divisions:- Pensions and Securities supervision Division, Insurance Supervision Division, and Non- Banks Supervision Division.

Pensions and Securities Supervision Division (PSSD MANDATE)

The Division is responsible for maintenance of financial system stability through regulation and supervision of the Pension Funds and Securities industries in Lesotho. The Division’s mandate is derived from three pieces of legislation, the Central Bank of Lesotho (Collective Investments Schemes) Regulations 2018, the Pension Funds Act 2019 and the Central Bank (Capital Markets) Regulations 2014.

 The Division is responsible for the following:

• Fostering the liquidity, solvency and proper functioning of a stable market-based financial system;
• Protection and providing information to the investing public
• To promote the safe and sound development of the financial system.

 Functions:

• formulation and execution of relevant laws regulating the financial institutions.
• Development of the Financial Sector through building requisite financial infrastructure and participating in other national initiatives;
• undertaking On-site and Off-Site Inspections and publishing relevant supervisory reports on the financial health of the Pension Funds and Securities industry in Lesotho.
• Licensing and registering regulated institutions in the Pension Funds and Securities industry and their intermediaries;
• Undertaking financial consumer protection through handling of Consumer Complaints.

Insurance Supervision Division Mandate

The Insurance Supervision Division is generally responsible for maintenance of financial system stability through the supervision and regulation of insurance sector in Lesotho. Its mandate is derived from the CBL functions as the Commissioner of Insurance and as contained in the Insurance Act of 2014 and include but not limited to:

• Registration of insurers and insurance intermediaries
• Formulation and enforcement of appropriate directives and codes of conduct of insurance business;
• Promoting healthy competition and sound business cooperation within the local insurance market;
• Offering protection, enlightenment and guidance to policyholders and public in matters of insurance policies and their application or implications; and
• To promote the safe and sound development of the financial system.

 The functions of the Division include the following:

• To formulate, adopt and execute relevant insurance policies and supervisory frameworks;
• To license insurance companies and their intermediaries;
• To develop the insurance sector through building requisite financial infrastructure and participating in other national initiatives with the same aim, e.g. Financial Inclusion;
• To undertake on-site and off-site inspections on the regulated institutions within the insurance sector;

Non-Banks Supervision Division (NBSD)

Mandate

The Division is generallyresponsible for maintenance of financial system stability through the supervision and regulation of Nonbanks Financial Institutions (NBFIs) in Lesotho.

 The Division’s mandate is derived from the following CBL functions as contained in the CBL Act of 2000:

• To foster the liquidity, solvency and proper functioning of a stable market-based financial system;
• To license, register and supervise institutions pursuant to the Financial Institutions Act of 2012, the Money Lenders Order of 1989, and the Building Finance Institutions Act of 1976, and the Insurance Act of 1976; and
• To promote the safe and sound development of the financial system.

 NBSD Key Functions:

• formulation, adoption and execution of relevant NBFIs policies and supervisory frameworks;
• formulation and execution of relevant laws regulating the financial institutions.
• Development of the Financial Sector through building requisite financial infrastructure and participating in other national initiatives with the same aim, e.g. Financial Inclusion.
• undertaking On-site and Off-Site Inspections and publishing relevant supervisory reports on the financial health of NBFIs in Lesotho.
• Collection and compilation of NBFIs statistics.
• Licensing and registering NBFIs.
• Undertaking financial consumer protection through handling of Consumer Complaints.

The Department consists of two (2) Divisions namely; Accounts Division; and Budget and Procurement Division.

Accounts Division

The Division is charged with the responsibility of providing financial information for the Bank. In terms of the CBL act 2000, the Division seeks to continually develop and maintain a sound accounting system for the Bank within the framework of the evolving International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS). The key objective of the Division is to develop and maintain a sound accounting system from which reliable financial statements can be produced from time to time. In order to implement these objectives, the two sections have identified the following core functions as key performance areas:

The key functions of the Division are:

• To collect, analyse, summarise and post accounting data to the general ledger on a daily basis;
• To match purchase orders to suppliers’ invoices and process payments appropriately; Ensure reasonableness of accounts in the general ledger; Maintain the Fixed Assets Register (FAR);
• To support the process of acquisitions, depreciation, tax depreciation and disposal of fixed assets;
• To process staff monthly payroll in accordance with instructions from Human Resources Department;
• To act as issuers of cheque books and commemorative coins;
• To maintain proper books of accounts and prepare monthly, quarterly and annual financial statements;
• To prepare, every year end, the final accounts of the Bank as required by the CBL Act 2000 and coordinate the work of the external auditors in the auditing of the Bank’s accounts;
• To assess and mitigate risks, and ensure that risk registers are kept up to date;
• To give guidance and / or assistance to other divisions in relation to financial accounting issues; and
• To address specific challenges including reporting that is compliant with IFRS and IAS, Innovation and Modernisation, integration of financial systems, and review of Departmental structure in line with the approved Enterprise Resource Programme (ERP) and Effective usage of technology systems in all areas within the Division.

Budget and Procurement Division

The Key functions of the Section include the following:

• To coordinate and compile the divisional budgets of the Bank by issuing budget instructions;
• To classify data from division’s proposals and conduct interviews;
• To consolidate and submit budget proposals to the Budget Committee;
• To ensure that the IDU System is updated with the approved budget;
• To monitor the implementation of the approved budget versus the availability of funds;
• To ensure that items are charged to appropriate account code centers;
• To produce monthly management reports, variance analysis that highlights areas of concern and recommendation; and
• To produce analytical reports and forecasts that will assist Management to make informed decisions.

Mandate

The mandate of the Department of Human Resources (DHR) is to attract and retain top talent through the adoption and subsequent implementation of human resources solutions. The Department is charged with the responsibility of providing technical and administrative support to the Bank on all matters relating to the management of human resources. This is achieved through seven of the Bank’s twelve Corporate Strategic Objectives.

Objectives

The objectives of the Department include the following:

• To provide strategic advice to the Bank on all HR related issues;
• To attract and retain top talent for the Bank that enables delivery of its mandate;
• To ensure that members of staff are motivated;
• To ensure maximum utilisation of talent;
• To create high performing teams;
• To engender trust in HR;
• To build harmonious relationships between management and staff; and
• To collaborate with management and line departments to ensure proper HR management.

Divisions

The Human Resources Department consists of two Divisions and one Section; the Business Partner Division, the Shared Services Division and the Centre of Expertise Section.

Business Partner Division

The Business Partner Division is the primary interface with the departments, and as such continues to provide immediate service and advice to Management and staff on all human resources functions.

Shared Services Division

The Shared Services Division is a back-office and or the last layer of communication for Human Resources information processes. The Business Partner and Centre of Expertise typically provide information that should be processed and kept by the Shared Services. To achieve the HR administration/transactional objective, shared services division is responsible to provide technological infrastructure to ensure optimisation of HR processes to provide maximum efficiency and effectiveness in HR service delivery.

Centre of Expertise (CoE)

CoE is a section within the department that reports directly to the Head of Department, it is a middle office which develops tools, frameworks, policies, guidelines, processes and procedures. In addition, CoE is responsible for specialised areas such as Training and Development, Compensation and Benefits, Employee Relations, Employee Wellness, Performance Management and Organisational Development.

Mandate

The mandate of the Department of Corporate Affairs is to provide a specialised and technical advice to the Bank on legal, corporate governance, communication, compliance, strategy, and secretariat services.

Divisions

The Department consists of the six (6) Divisions namely; Legal and Advisory, Corporate Communication, Corporate Governance, Compliance, Strategy Management and Board Secretariat.

Legal And Advisory Division

The Legal and Advisory Division is charged with the primary responsibility of managing the Central Bank of Lesotho’s legal risk. This is carried out through the exercise of the responsibilities of the Legal and Advisory Counsel as a function within the Bank. The functions of the Division include the following:

• To develop and review of the Bank’s regulatory and supervisory legal framework;
• To manage the Bank’s litigation;
• To provide legal advice and counsel to the Bank; and
• To manage contracts of the Bank.

Corporate Communication Division

The Corporate Communication Division is charged with the responsibility of promoting effective communication with both internal and external stakeholders thus enhancing the corporate brand image and reputation of the Bank.

The functions of the Division include the following:

• To keep employees informed about work related issues;
• To foster alliances and lobby the support of stakeholders for the various programmes and activities of the Bank;
• To manage the corporate social responsibility programme of the Bank;
• To monitor and improve customer care;
• To deal with stakeholder queries and enquiries;
• To liaise with the media;
• To provide technical support to management on communication issues;
• To provide protocol services including management of events of the Bank; and
• To promote strong bilateral and multilateral relations with the Bank’s international stakeholders.

Corporate Governance Division

The Corporate Governance Division is charged with the responsibility of management of and ensuring that there are effective and efficient governance and ethics processes within the Bank.
The functions of the Division include the following:

• To monitor governance of Information Technology;
• To promote the culture of Business Practices and Ethics;
• To manage performance management across the entire Bank;
• To ensure the maintenance of the code of Ethics;
• To establish and monitor Ethics Management process within the Bank;
• To develop Bank-wide Fraud prevention plan;
• To conduct Fraud and Ethics risk assessment process within the Bank; and
• To conduct ethics awareness and rollout and an on-going Training on ethics management.

Compliance Division

The Compliance Division is responsible for oversight and monitoring of Compliance Risk Management and control systems. The Compliance Function supports Senior Management in managing the compliance risks and embedding compliance in the culture of the Bank. In this regard, the Division supports the Bank with the following:

• To embed compliance with laws, regulations, business principles, rules of conduct, customer agreements and established good business practices in every aspect of the Bank;
• To establish and maintain effective compliance risk management and control systems, including monitoring and reporting; and
• To provide timely advice to the Bank on relevant changes in the compliance environment.

The functions of the Division include the following:

• To advise the Bank on Compliance issues;
• To support the Bank to raise awareness of Compliance Risk Appetite and established best practices;
• To support the Bank by identifying, assessing and overseeing the mitigation of Compliance Risks; and
• To report on compliance matters that warrant the attention of Management and the Board. Such reports include, as a minimum, exceeded compliance risk tolerance levels and unaccepted business practices.

Mandate

The mandate of the Department of Enterprise Risk Management is to facilitate efficient and effective management of the Bank’s risks and projects and provide assurance on continuity of critical business processes at all times.

Objectives

The objectives of the Department include the following:

• To facilitate an enabling environment for the identification, assessment and mitigation of bank risks;
• o provide assurance on continued operation of critical business process at all times; and
• To ensure Bank’s projects are efficiently managed and return value to the organization.

Divisions

The Department consists of three (3) Divisions namely; Risk Management, Business Continuity Management and Project Management.

Risk Management Division (RMD)

The functions of the Risk Management Division include the following:

• To develop and implement risk management tools (policies, frameworks and procedures);
• To raise awareness on risk management concepts to all levels of the Bank;
• To guide and direct departments on risk management; and
• To report and proffer advice to Management and the Board of Directors on risk-related issues for decision making.

Business Continuity Management (BCM) Division

The functions of the Business Continuity Division include the following:

• To develop and implement business continuity management tools (policies, frameworks, guidelines, models and procedures);
• To hold awareness campaigns on business continuity management concepts to all levels of the Bank;
• To guide and direct departments on BCM;
• To test and provide continuous improvement of the BCP and DR site; and
• To report and proffer advice to the Bank on BCM issues for decision making.

Project Management Office (PMO)

The mandate of the Division is to foster project management excellence throughout the Bank and ensure that only projects aligned with strategy are performed, and on time, within budget and acceptable quality levels. This goal is achieved through the development of a world-class best practice capability that will also enable well-planned projects to successfully deliver expected outcomes within budget, on time, and aligned with programme and portfolio goals and objectives.
The functions of the Project Management Division include the following:

• To provide project support services;
• To provide project specialist services;
• To provide project consultancy and advisory services;
• To provide strategic and governance services on project management; and
• To provide guidance, assistance and oversight of CBL portfolio of projects.

Mandate

The Department of Operations draws its mandate from the Central Bank Act of 2000 and Payment Systems Act of 2014 respectively. As part of that mandate, it offers banking services to the Government and its agencies, commercial banks and international agencies. The Department has a mission to provide• efficient and timely banking services and ensures that the payment system of Lesotho is safe and sound and compares well with those in the Southern African Development Community (SADC) region, and internationally. The key functions of the Department can be summarised as follows:
•To promote the efficient operation of the payments systems;
• To issue, manage and redeem the currency of Lesotho; and
• To act as banker and advisor to, and as fiscal agent of, the Government of Lesotho.

Divisions

The Department consists of three (3) Divisions namely; Banking Operations, Currency Operations and National Payment System.

Banking Operations Division

The main functions of the Banking Operations Division include the following:

• To act as a banker to the banks by accepting deposits, providing bank account services, maintaining banks' clearing and settlement accounts, and other deposit accounts;
• To operate the clearing house to provide the clearance facilities for interbank transactions;
• To participate in the Real Time Gross Settlement System (RTGS) on behalf of the Bank and the Government; and
• To act as banker to the Government by operating accounts and tellers' facilities for Government Departments and agencies by way of acceptance of deposits and making payments on behalf of the Government.

Currency Operations Division

The Currency Operations Division draws its mandate from Section 6(b) of the Bank Act, “to issue, manage and redeem the currency of Lesotho”. Thus, it is tasked with currency management which involves, inter alia, handling of bulk deposits and withdrawals by commercial banks, systemic issue of new and re-issuable currency and destruction of soiled and mutilated banknotes.

The Division follows the Clean Note Policy to uphold the standard of the national currency and, in that context, its include the following:

• To issue Maloti and Rand to commercial banks to satisfy public demand for currency;
• To ensure maintenance of clean quality notes that are also durable and meet machine processing standards;
• To guard against counterfeit notes by ensuring that currency design has adequate security features;
• To manage the national currency to ensure adequate supply of currency to meet demand at all times;
• To redeem currency that is mutilated or has been taken out of circulation, and ensure that soiled and mutilated currency is destroyed;
• To maintain proper and adequate records of stock of currency and to ensure that withdrawals and deposits are accounted for and properly recorded in currency registers;
• To repatriate Rand to South Africa and collect Maloti from South Africa; and
• To ensure safe custody of currency.

National Payment System (NPS) Division

The National Payment System Division is operating under the ambit of Section 6(h) of the Central Bank of Lesotho Act of 2000 and the Payment System Act of 2014. Its main function is to promote an efficient operation of payment systems. NPS performs this function through operation and administration of the Real Time Gross Settlement System (RTGS) called Lesotho Wire and through the oversight of the payment systems. The main goal of this is to ensure effectiveness in inter-bank funds transfer and reduction of payment risks, especially systemic risk.
The functions of the Division include the following:

• To put in place appropriate legal and regulatory framework that can support a modern payment and settlement system and the implementation of RTGS for large value payments;
• To guide the evolution of Lesotho’s payment system, focusing primarily on the overall soundness and effectiveness of the system.
• To ensure safety and efficiency of Lesotho’s systemically important payment and securities settlement systems.
• To facilitate financial inclusion initiatives that addresses the needs of the under-banked and the unbanked.
• To administer, operate and monitor daily operations of Lesotho Wire for high value and time critical payments;
• To facilitate and promote cross-border trade and investment by putting an enabling legal and regulatory framework that support deployment and operation of cross-border payment and securities settlement systems;
• To ensure that all systematically important payment and settlement systems comply with international standards such as the Principles for Financial Market Infrastructure (PFMIs); and
• To reduce the use of cash and paper-based instruments and promote electronic payments.

Departmental Mandate

To safeguard the safety, soundness and efficiency of payment, clearing and settlement systems as well as to protect the interest of consumers

Mission

Developing and implementing best of class payment, clearing and settlement systems through responsive and dynamic regulation, robust infrastructure, effective oversight and customer centricity.

Vision

To ensure that every Mosotho have access to a bouquet of payment options that are safe, secure, reliable, convenient, quick and affordable

 Divisions

Payment systems are generally categorized as retail payment systems (RPSs) or as large-value payment systems (LVPSs). RPSs typically handle a large volume of relatively low-value payments in such forms as cheques, credit transfers, direct debits, and card payment transactions. RPSs may be operated either by the private sector or the public sector. LVPSs typically handle large-value and high-priority payments. Many LVPSs are owned and operated by central banks. The function of the Department of Payment and Settlement is structured in line with this definition, but more importantly also taking into consideration of the oversight role.

Operations & Development Division

Mandate

• Operate and monitor large value payment system
• Provide terms and conditions for admission to be a participant in the large value payment system.
• Organize, set technical standards and regulate the participation of members on the large value payment system

Policy, Oversight and Research Division

Mandate

• Facilitate oversight of the payment and settlement system. Oversight of payment and settlement systems is a central bank function whereby the objectives of safety and efficiency are promoted by monitoring existing and planned systems, assessing them against these objectives and, where necessary, inducing change
• Promote financial inclusion and FinTech development
• Licensing for operating a system in Lesotho (MNO and FinTech)

Payment Association of Lesotho Operations

Mandate

• Operate (Clearing and switching) and monitor retail payment system (cheques, credit transfers, direct debits, and card payment transactions)
• Technology is facilitating the entry of new players in payments. The prominence of traditional providers of payment services (banks and debit and credit card networks) is being challenged by non-traditional Payment System Providers (telecom operators, social networks, payment aggregators). Therefore, there is emerging need to organise, set technical standards and regulate the participation of members on the retail payment system.
• Supporting the development of effective standards and infrastructure arrangements

Mandate

The mandate of the Department of Internal Audit is to determine whether the systems of financial and risk management, internal control and governance processes, as designed and represented by Management, are adequate and functioning in the following manner:

• Risks are appropriately identified and managed;
• Business objectives are achieved in an efficient and effective manner;
• Reliable financial and operating information is provided to Management and staff for decision making and accountability;
• Legislative, regulatory or contractual requirements are recognised and met; and
• Resources are adequately protected, used economically and effectively applied against stated priorities.

Objective

The objective of the Department is to be a strategic partner and work co-operatively with Management and staff to improve the economy, efficiency, and effectiveness of operations. It assists the Central Bank of Lesotho in accomplishing its objectives by bringing a systematic and disciplined approach to evaluate and improve the effectiveness of the Bank's risk management, control, and governance processes.

Divisions

The Department consist of two (2) Divisions namely;

• Operational, Financial and Compliance
• Information and Technology Audits.

The functions of the above-mentioned Divisions include the following:

• To evaluate the reliability and integrity of information and the means used to identify measure, classify, and report such information;
• To evaluate the systems established to ensure compliance with those policies, plans, procedures, laws, and regulations which could have a significant impact on the Bank;
• To evaluate the means of safeguarding assets and, as appropriate, verifying the existence of such assets;
• Evaluate the effectiveness and efficiency with which resources are employed;
• To evaluate the operations or programs to ascertain whether results are consistent with established objectives and goals and whether the operations or programs are being carried out as planned;
• To monitor and evaluate governance processes;
• To monitor and evaluate the effectiveness of the Bank's risk management processes;
• To perform consulting and advisory services related to governance, risk management and control as appropriate for the Bank;
• To report periodically on the Internal Audit Department’s purpose, authority, responsibility, and performance relative to its plan;
• To report significant risk exposures and control issues, including fraud risks, governance issues, and other matters needed or requested by the Board; and
• To evaluate specific operations at the request of the Board or Management, as appropriate.

Functions of the Department and Divisions

The Department of Facilities Management and Protective Services (DFMPS) is mandated to support the functionality, safety, and sustainability of the Bank’s portfolio on infrastructural assets namely Property, Plant & Equipment (PPE). It is further entrusted with the responsibility to provide a secure and safe working environment for all the Bank employees, clients, and customers.

The Department is organised into two Divisions and their Sections/Units as follows:

Facilities Management Services Division

The mandate of the Facilities Management Services Division (FMSD) is to ensure that all movable and immovable assets of the Bank are maintained and operate at all times at optimal level. It is entrusted with the responsibility to provide conducive working environment within the Bank premises; oversee and manage all construction projects and maintenance of the assets and infrastructure of the Bank; provide support in areas of logistics/transport, hygiene, and gardening services.

Maintenance Services

The Maintenance Unit is charged with the primary responsibility of functional checks, servicing, repairing, and/or replacing worn out devices, equipment, machinery, building infrastructure where necessary, and designing improvements well as implementing such improvements to keep up with times and technology.

Transport & travel

The Transport Services Unit is charged with the responsibility of safeguarding the Bank’s fleet, providing transport to all staff members and designated visitors to the Bank. The Unit is further mandated to ensure that all vehicles are periodically serviced and always roadworthy.

Hygiene control & gardening

The Hygiene & Gardening Services Unit is charged with the responsibility of providing a conducive working environment for all staff and visitors to the Bank by always keeping the premises clean. They also provide refreshments for staff and visitors.

Protective Services Division

The mandate of the Protective Services Division (PSD) is to provide a secure and safe working environment for all the Bank employees, clients and customers. It protects the assets and infrastructure of the Bank while at the same time supporting the daily operations of the Bank. The Division is further divided into three sections as follows:

2.1 Security Systems Management

Security Systems Management is responsible to ensure efficient functioning and maintenance of electronic security system as well as overseeing the operations of control room. The section is further mandated to undertake division’s administrative tasks that include leave plan implementation and training of staff.

2.2 Operations

The Operations Section is mandated to ensure day-to-day protection and safety of staff and assets of the Bank. The Section is responsible to security control within the Bank premises through access control, manning of security posts, escorting visitors and contractors within the Bank building and premises. The Section is also entrusted with the responsibility of evacuation of staff and visitors during emergencies.

2.3 Security Risk Management

The Security Risk Management Section is responsible for management of the Bank’s security risks and gathering of intelligence that is relevant to the financial sector. The Section is further responsible for vetting of prospective Bank employees and suppliers; liaising with law enforcement agencies and financial institutions on matters of mutual interest; and administering the Bank’s At Risk Personnel Protection Program.