MEASURES TO COMBAT NON-PERFORMING HANDS IN THE BANKING SECTOR

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BENKI KUU YA TANZANIA

BANK OF TANZANIA

16 Barabara and Jakaya Kikwete

16 Jakaya Kikwete Street

SLP 2303

P.O. Box 2303

40184 DODOM

40184 DODOM

TANZANIA

TANZANIA

Simu: +255 26 2962586

Phone: +255 26 2962586

Barua Pepe: [email protected]

Email: [email protected]

GENERAL PUBLIC NOTICE

MEASURES TO DEAL WITH NON PERFORMING LOANS IN THE BANKING SECTOR

SECTOR

The Bank of Tanzania conducted a study to establish the main reasons behind the high non-performing loans in the banking sector and found that, to a large extent, employees of some banks and financial institutions are directly responsible in issuing loans without following up. procedures, fraud / corruption or other practices amounting to a lack of integrity. The high rate of non-performing loans is one of the main causes of high lending rates and can lead to instability in the banking sector.

In view of the above, the Bank of Tanzania would like to inform the general public that it has found it necessary to take the actions listed below in order to address the problem of high nonperforming loans in the banking sector:

  1. Perform a review of banks and financial institutions to determine the causes and employees who are directly responsible for non-performing loans. In this regard, when it is established that a particular employee is liable for non-performing loans by issuing loans without following procedures, fraud or lack of integrity, the bank or financial institution concerned will be required to take the measures appropriate legal action against the employee (s), and the Bank of Tanzania will blacklist affected employees and prohibit them from being employed in any bank or financial institution operating in Tanzania;
  2. Require banks and financial institutions whose employees have non-performing loans with another bank or financial institution to submit employee (s) details to the credit reference bureau. In addition, the Bank of Tanzania will blacklist the affected employee and prohibit him from being employed in a bank or financial institution operating in Tanzania, if it turns out that non-compliance with the loan service is due. negligence, fraud or lack of integrity;
  3. Require banks and financial institutions not to extend credit to unscrupulous borrowers who have borrowed with the intent not to repay the loans or to use deceptive means. Details of these borrowers will also be kept in a special register which will be shared with banks and financial institutions for this purpose. In the meantime, borrowers in this category have three months to

make arrangements to repay loans before their names are entered in the special register; and

4. Require banks and financial institutions to submit details of officials who have non-performing loans to their employers for appropriate actions. In addition, the details of these borrowers will also be kept in a special register which will be shared with banks and financial institutions to ensure that these officials do not have access to any additional credit until appropriate action has been taken. and that the non-performing loan be regularized.

The Bank of Tanzania wishes to urge the general public to fulfill their fiduciary and contractual obligations once they access credit from banks and financial institutions. In addition, the general public is encouraged to report to the bank, financial institution or Bank of Tanzania any event of fraud or corruption encountered while accessing any service of a bank or institution. financial. In the meantime, the Bank of Tanzania will continue to engage banks and financial institutions to ensure that credit granting procedures are effectively followed to ensure quality credit and reduce the rate of non-performing loans.

TEACHER. FLORENS DAM LUOGA GOVERNOR BANK OF TANZANIA 07 NOVEMBER 2021

Disclaimer

Bank of Tanzania published this content on November 07, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on 07 November 2021 03:37:00 PM UTC.

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