BoT takes over Twiga Bancorp operations

BANK of Tanzania (BoT) has, starting yesterday, taken over the administration of Twiga Bancorp Limited, as it pronounced it undercapitalised. The announcement was made in Dar es Salaam yesterday by the Central Bank Governor, Prof Benno Ndulu, when speaking to reporters.
Prof Ndulu said BoT has already appointed a statutory manager to handle the affairs of the bank and has as well suspended the board of directors and management of the bank.

“The measures have been taken according to the powers bestowed to BoT under Section 56 (1) (g and i) and 56 (2) (a)-(d) of the Banking and Financial Institution Act of 2006,” he noted.

He further said that a systematic risk to the stability of the financial system and that of continuation of Twiga operations in its current capital position was detrimental to the interest of its depositors.

Expounding further, he said Twiga Bancorp had a challenge relating to its capital structure to serve customers throughout Tanzania for a very long time. As a matter of fact, the bank will not operate normal business for one week during which relevant arrangements for future operations are made.

“BoT assures the public that it will continue to protect the interests of depositors and maintain the stability of the banking sector,” Prof Ndulu said.

BoT Director of Banking Supervision, Mr Kennedy Nyoni, said the bank was supposed to have a capital of 7.5bn/- and the government has been adding capital regularly, but the bank was having -21bn/- as capital.

“The bank is having a lot of properties but to reach that stage it means its debt has outstripped properties,” he said. In July, this year, President John Magufuli ordered BoT and finance ministry to take action against the management of Twiga Bancorp, describing the small state-run bank as a loss making entity.

“If it cannot survive, let it die,” the president said in reference to the bank, revealing that the bank had posted a loss of 18bn/- and criticising the fact that no action has been taken against the bank’s management for under-performance. He said his administration will not continue to provide state subsidies to loss-making parastatals.

Twiga Bancorp Limited was licensed in 1998 by the BoT as a non-bank financial institution under the Banking and Financial Institutions Act, 1991.

The licence empowered the bank to handle all banking products and services except taking deposits on current account. Over the years, the bank has continued to implement strategies aimed at transforming the bank into a fully fledged commercial bank. In January, this year, the bank formulated a five-year plan with the major objective of expanding its operating capital.

BoT takes over Twiga Bancorp operations BoT takes over Twiga Bancorp operations Reviewed by on 1:06:00 AM Rating: 5

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