In the exercise of its powers under Section 56(1)(g)(iii) of the Banking and Financial Institutions Act, 2006, the Bank of Tanzania (BOT) has, effective 2nd August 2018, taken over the administration of Bank M Tanzania Plc (Bank M).
In its public notice BOT explains that the decision to take over the bank follows determination that Bank M has critical liquidity problems and is unable to meet its maturing obligations.
“Continuation of the bank’s operations in the current liquidity condition is detrimental to the interests of depositors and poses systemic risk to the stability of the financial system,” the statement reads.
Accordingly, BOT has appointed a Statutory Manager to manage the affairs of Bank M and suspended its Board of Directors and Management. Further, Bank M will not open for normal business for up to ninety days during which BOTa will determine an appropriate resolution option.
Meanwhile, BOT assures the public that it will continue to protect the interests of depositors and maintain stability of the banking sector.
Earlier this year, BOT revoked the banking license of 5 banks, namely Covenant Bank, Efatha Bank, Njombe Community Bank, Kagera Farmers’ Cooperative Bank, and Meru Community Bank, on the basis of their undercapitalization.
About Bank M
Bank M received its commercial banking license from the Bank of Tanzania in February 2007 and opened for business in July of the same year.
The bank is a medium-sized financial services provider in Tanzania. It provides financial services to individuals, small to medium enterprises, and large corporations.
