Tanzania’s central bank had fined five commercial banks over US$800,000 for circumventing anti-money laundering rules. The latest move is to put a tight leash on corrupt practices in the financial sector and is expected to strengthen the powers of the financial services sector regulator-Bank of Tanzania.
According to the Bank of Tanzania (BoT), the fines were imposed for failure to conduct proper customer due diligence and file suspicious transaction reports to the state-run Financial Intelligence Unit (FIU). I&M Bank has to pay the biggest fine at TSh655 million (Ksh29.62 million). The Equity Bank has been fined TSh580 million followed by UBL Bank (Tsh325 million), Habib African Bank (Tsh175 million) and African Banking Corporation (Tsh145 million). The fined banks have been given three months time to implement anti-money laundering measures, such as disciplinary action against erring officers and other staff members, who did not follow know your customer (KYC) norms. There were several reports about the laxity by bank officials in implementing the anti-money laundering measures in the banking sector and that has compelled the regulator to tighten the regulatory oversight over commercial banks and financial institutions. Ninety days have been granted by the regulator to the financial institutions and banks to set the house in order, failing that heavy penalty would be imposed on them. Most of the banks, of late, have been hit by mounting bad loans.
