Regulatory Alerts2023-01-01
Internal Capital Adequacy Assessment Process (ICAAP) Guidelines for Banks and Financial Institutions, 2023
The Bank of Tanzania issued these 2023 guidelines to require all banks and financial institutions, operating on solo and consolidated bases, to establish a comprehensive Internal Capital Adequacy Assessment Process (ICAAP) effective April 2025. The framework mandates boards and senior management to oversee risk-based capital planning, conduct rigorous stress testing, and ensure capital levels adequately cover both Pillar 1 risks and material unquantified exposures like concentration, interest rate risk in the banking book, and climate-related risks. Institutions must submit annual board-approved ICAAP reports by late April detailing risk appetite, capital targets, and stress test outcomes, while the Bank conducts periodic supervisory reviews to enforce commensurate capital levels and initiate corrective measures when necessary.