| BoT HQ |
Almost two-third of commercial banks
have complied with the new minimum capital requirement imposed by the
Bank of Tanzania to safeguard depositors.
Last year, BoT issued a three-year
directive to commercial and community banks to buffer their capitals to
withstand possible financial crises.
“The Bank of Tanzania recognizes the
importance of strengthening banks’ buffer capitals to enable them
withstand financial crises,” said part of the letter, signed by Finance
Minister and BoT governor.
However, with less than two years to go,
no community bank has managed to raise the required capital, termed
Capital Enhancement Order, from 250m/- to 2bn/-.
“As at August 31, 2012,
22 out of 33 commercial banks had complied, while community banks are
yet to comply,” the letter, sent yesterday to IMF Managing Director
Christine Lagarde, said.
The Capital Enhancement Orders for fully
fledged commercial and community banks were published in the Government
Gazette on February 23, 2012 and June 22, 2012 respectively.
The requirement came following the
aftermath of global financial crisis that rocked the global economy
between 2008 and 2010 and is still looming large in the Euro zone.
At
the end of June 2012, the ratios of core capital and total capital to
risk weighted assets were 17.5 per cent and 18.1 per cent compared with
the legal minimum requirements of 10 per cent and 12 per cent,
respectively.
In the same period, the ratio of
nonperforming loans to total loans was 8.0 per cent compared to 9.0 per
cent at the end of June 2011.
“The ratio of liquid assets to demand
liabilities was 39.4 per cent, against the statutory requirement of 20
per cent,” the IMF chief was told through the letter.
Source: The Daily News, www.dailynews.co.tz, reported by Abduel Elinaza
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