Dar es Salaam. Bank of Tanzania (BoT) has
revoked the business licence of Mbinga Community Bank after the bank’s capital
fell below the required levels.
Mbinga Community Bank becomes the second institution to be
closed by BoT this week after similar measures were taken against FBME bank,
though for totally different reasons.
A statement released by BoT to the media Friday indicates
that the central bank has decided to take possession of the bank and
discontinue its operations as well as place it under compulsory liquidation.
BoT has also appointed the Deposit Insurance Board (DIB) as
the liquidator effective from Saturday.
The measure was taken upon determination by BoT that the bank was critically undercapitalized and insolvent hence violating the requirements of the Banking and Financial Institutions Act of 2006 and its regulations.
The Act requires a bank’s capital not to fall below Sh15
billion. However, BoT statement didn’t state by how much Mbinga Community
Bank’s capital has fallen.
“If the bank will continue with its operations with the
current capital it will be detrimental to the interest of its depositors
something, which will pose risk to the stability of the entire financial
system,” reads the statement in part.
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