Tanzania fines five banks for lax anti-money laundering controls

Tanzania's President John Magufuli.
Tanzania's President John Magufuli. FILE PHOTO | NMG 

Dar es Salaam

Tanzania’s central bank said on Monday it had fined five commercial banks over $800,000 (Sh83 million) for breaching anti-money laundering rules, the latest in a series of moves aimed at tightening regulation in the financial services sector.

The Bank of Tanzania (BoT) said in a statement 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 was slapped with the biggest fine at TSh655 million (Ksh29.62 million), followed by Equity Bank (TSh580 million), UBL Bank (Tsh325 million), Habib African Bank (Tsh175 million) and African Banking Corporation (Tsh145 million).

The banks were not immediately available for comment.


The regulator gave three months to the sanctioned banks to implement various anti-money laundering measures, which include taking disciplinary action against all staff members “who were involved in opening implicated deposit accounts contrary to KYC (know your customer) requirements”.

Regulatory oversight

Tanzania has tightened regulatory oversight over commercial banks and other financial institutions over the past few years.

The central bank last month gave all banks and financial institutions in Tanzania 90 days to establish primary data centres in the East African nation, saying it will impose hefty fines on lenders that fail to comply.

The country’s financial services sector, which is dominated by lenders like CRDB Bank and NMB Bank, has been hit by a spike in bad loans, which have stifled the growth of credit to the private sector.

In December, the International Monetary Fund said nearly half of Tanzania’s 45 banks were vulnerable to adverse shocks and risked insolvency in the event of a global financial crisis.