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Tanzania’s Central Bank Revokes Licenses of Financial Institutions
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The Bank of Tanzania has revoked the licenses of several financial institutions due to failure to meet prudential requirements and engage in unsafe practices.
Reasons for Revocation
According to a statement released by the bank, the revocations were made due to:
- Failure to commence operations within the prescribed timeframe
- Providing false or misleading information during the licensing process
- Failing to comply with terms and conditions of their licenses
- Refusing to permit inspections
- Providing false information
- Engaging in a pattern of unsafe practices
- Ceasing to do business in Tanzania without notice
- Being deemed insolvent
Consequences for Directors and Officers
Directors and officers of the revoked financial institutions are facing consequences, including:
- Removal from their positions due to misconduct
- Ban on serving as directors or officers of any other financial institution without prior approval
Restrictions on Use of Word “Bank”
The Bank of Tanzania has imposed restrictions on the use of the word “bank” and its derivatives, requiring institutions to obtain permission before using such terms in their names or descriptions. The bank has also prohibited institutions from using acronyms such as M.F.C. and H.F.C. without prior approval.
Restrictions on Ownership
The Bank of Tanzania has imposed restrictions on ownership of financial institutions, including:
- Prohibiting any individual or entity from owning more than 20% of the voting shares of a bank or financial institution
- Establishing criteria for reviewing ownership or control changes in financial institutions, taking into account factors such as:
- Ability to effectively supervise the entities
- Potential risks to the institution
Public Interest
The Bank of Tanzania’s actions are aimed at maintaining public confidence in the country’s financial system and ensuring that financial institutions operate in a safe and sound manner. The bank has vowed to continue monitoring and regulating the financial sector to protect the interests of depositors, investors, and the general public.