Five banks in Tanzania have had their licenses revoked by the country’s central bank for having inadequate operational capital.
The banks include Covenant Bank for Women, Efatha Bank Limited, Njombe Community Bank Limited, Meru Community Bank Limited, and Kagera Farmers’ Cooperative Bank Limited.
The Banks breached core capital rules, according to the Bank of Tanzania. The East African has reported that the five banks have now been placed them under receivership.
“The aforesaid banks are critically undercapitalised, continuation of their operations in their current position is detrimental to the interest of depositors and poses a risk to the stability of the financial system,” the BoT said.
Tanzania’s central bank was asked by the country’s President last year to deal with banks lacking adequate capital.
President John Magufuli said Tanzania has “58 banks. We want the banking regulator to take action against the failing institutions. We would rather have a few viable banks than many failing ones”.
Capital requirement for banks in African has become a major issue. Last year Ghana’s central bank also revoked licenses of two indigenous banks for lacking adequate capital.
Source: Africafeeds.com
