Top Tanzanian Banks Fined Billions Of Money For Engaging In Suspicious Transactions

Five Banks in Tanzania are bearing huge losses after being fined up to TZS 1.88 billion (USD 800,000) by Tanzania’s central Bank for engaging in suspicious transactions.

The banks including African Banking Corporation, Equity Bank, I&M Bank,UBL Bank and Habib African Bank are faulted for filing suspicious transaction reports to the Financial Intelligence Unit (FIU).

In a statement, the Bank of Tanzania said that it had “imposed monetary policies on five banks for breach of regulations of the Anti-Money Laundering Regulations 17, 22 and 28 for failure to conduct proper customer due diligence and file suspicious transaction reports to Financial Intelligence Unit.”

I&M Bank was fined TZS 655 million, Equity Bank (TZS 580 million), UBL Bank (TZS325 million), Habib African Bank (TZS175 million) and African Banking Corporation (TZS145 million).

In effect, the central bank has granted the sanctioned banks a three month period to implement various anti-money laundering measures.

The banks are expected to take disciplinary action against all staff members “who were involved in opening implicated deposit accounts contrary to KYC (know your customer) requirements.”

“Make a fresh review of all Know Your Customer (KYC) compliance status, make an assessment of the adequacy of internal controls and take necessary steps to ensure controls were robust to deter noted weaknesses,” the regulator further directed.

“The Bank of Tanzania wishes to remind all banks and financial institutions to ensure compliance with laws, regulations, and directives issued at all times,” the bank said.

For the past few years, the Magufuli-led government has tightened its regulatory control on the financial sector and other commercial sectors including the foreign exchange bureaus.

In August, the regulator gave all banks and financial institutions in Tanzania 90 days to establish primary data centres in the East African nation.

In 2018, the bank also suspended five commercial banks from trading in the interbank forex exchange market (IFEM) for a month, as part of its ongoing regulatory measures to subdue irregular FX practices and money laundering.

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