BANK OF TANZANIA'S NEW CIRCULAR WEIGHS ON ADDRESSING LOSSES IN BANKS

 

Bank of Tanzania (BOT) wants to create a resilient and lossless banking sector in the next two years if its new circular proves a success.

The Central Bank, a week ago, issued a circular directing all banks and financial institutions to maintain a cost to income ratio (CIR) of less than 55 per cent and get the non-performing loans (NPLs) to the minimum target of less than or equal to 5.0 per cent.

Also, the circular granted a period of up to 31st December 2022 to regularise the CIR or 'risk regulatory sanctions'.

The directive, similarly requires banks and financial institutions  to submit by end of March, a comprehensive plan with timelines, clearly indicating how they will attain the acceptable levels within the granted time period.

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