which shall vest all the powers of management and control and which shall be responsible for the formulation of policies of the bank or financial institution ( section 30 ( 1 ) ; ii. the board of directors shall consist of not less than 5 members ( section 30 ( 2 ) ; iii. every financial service provider must have a chief executive officer and chief financial officer who shall not qualify to hold office unless it is shown that they are fit and proper persons, above 21 years old, have not been convicted of a felony or offence involving dishonesty, are not mentally incompetent, have never been removed from office under the bfsa, have not managed a company that has gone into liquidation or entered into a composition with creditors ( section 31 ) ; iv. the majority of directors must be from outside the bank ( section 32 ( 1 ) ; v. directors, chief executive officers and chief financial officers are expected to act honestly, in good faith and in the interest of the company whilst exercising due care, diligence and skill ( section 33 ) ; vi. a director is required to declare in writing to the board annually, the names and addresses of the director ’ s associates and full particulars of every material interest ( section 35 ) ; vii. a director who ( a ) negligently or with intent to deceive, makes any false or misleading statement or entry or omits any statement or entry that should be made in any book, account, report or statement of the financial service provider, or ( b ) obstructs or endeavours to obstruct ( i ) the proper performance by an auditor of the auditor's duties in accordance with this provisions of this act ; or ( ii ) a lawful inspection of the service provider by a duly authorised inspector appointed by the bank of zambia, commits an offence and is liable on conviction to a fine or to imprisonment ( section 36 ). in addition to the provisions of the bfsa, the boz has put in place a number of regulations aimed at enhancing good corporate governance for the fsps regulated by the boz, some of which are listed below : i. the prohibition and prevention of money laundering act of 2001 ( ppmla ) and the anti - money laundering directives obligate the board of directors to formulate anti - money laundering policies and ensure senior management implement these policies ; and ii. 5. 6 the corporate governance guidelines for financial institutions issued in november 2006 set forth a broad framework of

##checked use of the financial system by criminal organisations risks undermining individual institutions and ultimately entire financial systems. when banks or financial institutions become part of a criminal network, they lay themselves open to loss from fraud if they do not screen out undesirable customers or if their own officers are compromised. in the face of the above economic, financial and political threats, the international financial community has recognised that public confidence in such institutions, and hence their stability, could be undermined if they became associated, even inadvertently, with criminals. in order to prevent the escalation of money laundering, the following measures have been undertaken : i. the government has enacted the prohibition and prevention of money laundering ( ppml ) act 2001 which has criminalized money laundering and provides for the forfeiture of property by offenders ; ii. boz has issued directives to all regulated financial institutions on combating money laundering to ensure that the potential threats posed by money launderers are limited ; and iii. boz has also developed a supervisory framework aimed at conducting targeted inspections to ensure banks and nbfis are complying with the anti - money laundering legislation and directives. 5. 3 improvement of credit culture in order to improve the credit culture in the country, the boz issued the credit data ( privacy ) code and the credit reference services ( licensing ) guidelines to facilitate the establishment of credit reference bureaux ( crbs ). the guidelines were gazetted on 30 january 2006. subsequently, the first credit bureau, namely, credit reference bureau africa limited ( crbal ) was licensed on june 5, 2006 and was launched on january 11, 2007. the main task of a crb is to provide lenders with factual information upon which they can base their lending decision. while crbs facilitate sharing of information without approving or disapproving credit, or collecting debts they also assist consumers understand the responsible use of credit and help lenders in identifying good payers from defaulters. once fully operational the credit bureau will : i. allow for increase in credit extension because of better risk profiles ; ii. reduce credit processing costs and times as well as loan write - offs ; iii. lower borrowing costs ; and iv. enhance the credit culture, which in turn will allow for the provision of the much needed finance for the development of various sectors. 5. 4 cost of banking services • it has been observed that the zambian banking industry has one of the highest operating costs when compared to other countries in sub