seven. this is a welcome development for the botswana banking sector and the wider financial industry. i would, therefore, like to take this opportunity to implore capital bank to immediately make its presence felt in the domestic market and contribute positively to the promotion of a competitive, soundly - based and growing financial sector. as we are all aware, a major development challenge for many countries in our region is the need to increase the availability and access to high quality banking facilities and services at affordable cost to both businesses and households. not so long ago, a survey sponsored by a consultancy on financial sector issues, finmark trust, found that almost 57 percent of the population in botswana do not have access to any form of banking. in addition, the branch network, marketing and other banking services were found to be highly concentrated in urban and semi - urban areas. the survey also found that the criteria and the initial deposit required for opening a bank account were restrictive. as a result, large segments of the population could not gain access to financial services. the bank of botswana had also obtained credible evidence that the reasons for this undesirable state of affairs included very high transaction costs arising from, among others, high bank account maintenance fees and multiple bank changes, which were regrettably not matched by the quality of service. my appeal is made against the background of a public outcry with regard to the cost and quality of financial intermediation, as well as public perceptions of a lack of transparency, particularly in respect of bank charges. commercial banks continue to be regarded as not operating in conformity with their pledge to serve and deliver world - class service and satisfy market needs. overall, the banking industry is still considered to be solely profit - oriented, and interested only in high returns and not in offering high quality service. these findings suggest that it is imperative for all players in the financial services industry to turn the right corner and embrace a more “ financial inclusive ” approach in reaching out to the unbanked members of society. it is no secret that the high cost of banking services retard efforts to encourage financial saving and discourage full use of the banking facilities, at a time when banking is no longer a luxury but a need. while it is appreciated that the cost of providing banking facilities and infrastructure in a vast but sparsely populated country such as botswana can be significant, it is important that the level of banking charges should be seen to be commensurate with the quality of banking services. the bank of

unsustainable debt in the us housing market that sent undesirable ripple effects across major banking and financial centres. no wonder observers are now cynical about banks in the face of plummeting shareholder value and foreclosure on housing loans in affected markets. in the circumstances, you in banking business are well advised to put in place robust and effective internal controls environment and risk management infrastructure, and educate your staff so that they are in a position to prevent fraudulent transactions. on a slightly different but related matter, the chairman of capital bank commented on the upward adjustment of interest rates that was effected earlier this week. i took it as an invitation for me to comment briefly on the bank ’ s primary objective of maintaining price stability. while monetary policy has to respond to a sustained increase in inflation, as it is currently the case due to the escalating oil and food prices, this is done in the context of the framework articulated in the bank ’ s monetary policy statement. as i stated at the launch of the statement in february this year, monetary policy indeed focuses on the containment of inflation within a medium - term ( 3 - year ) horizon on the basis of inflation forecasting. this is in view of the significant transmission time lag before policy action takes effect. accordingly, therefore, monetary policy will be preemptive, as necessary, in order to mitigate secondround effects relating to unsustainable demands for wages and other domestic resource increases, which would lead to a further spiralling of inflation. it is just as important to anchor expectations of low and stable inflation. it is against this background that the bank rate was increased by half a percentage point to 15 percent on may 26, 2008. as i conclude, i wish to applaud the board, management and staff of capital bank for bringing additional banking services and facilities to gaborone. in the not too distant future, i would like to see expansion and extension of your services to other parts of the country. the magnificent premises i viewed last night are no doubt a benchmark for others to follow. my first impressions are that you will settle down to business at the speed of lightning. i thank you for your attention.