Bank of Tanzania Bank Licensing Requirements and Application Guidelines

BANKS General information

1. The name of the proposed bank shall be subject to prior approval of Bank of Tanzania.

2. A bank shall be organized in the form of a company limited by shares and incorporated under the laws of the United Republic of Tanzania.

3. The applicant to pay a non-refundable application fee of TZS 3,000,000 for development finance bank; TZS 10,000,000 for commercial, community, cooperative, Islamic and merchant banks; or any other amount as may be determined by the Bank.

4. The non-refundable application fees to be paid by banker’s cheque payable to Bank of Tanzania or by cash deposited to or direct transfer made to Bank of Tanzania: Account No: 9924DDBGHQT Account Name: Intermediary Account Banking

5. A bank shall commence operations with and maintain at all times a minimum absolute core capital of TZS 50,000,000,000 for development finance bank; TZS 25,000,000,000 for merchant bank; TZS 15,000,000,000 for commercial, cooperative (nationwide network) and Islamic banks; TZS 5,000,000,000 for microfinance and cooperative (regional network) banks; and TZS 2,000,000,000 for community bank.

6. An applicant for a license shall designate a principal contact person for the purposes of application processes and inform the Bank of the name and address of such person.

7. An applicant for a bank licence shall, before submitting an application, apply for a pre-filing meeting with the Bank. Documents/information required for application

8. Letter of application in the prescribed form provided in the 2nd Schedule of the Banking and Financial Institutions (Licensing) Regulations, 2014);

9. Proof of payment of a non-refundable application fee;

10. Authenticated legal documents or board resolution authorizing the signatory;

11. Proposed Memorandum and Articles of Association (unregistered);

12. Proof of source and availability of funds for investment as capital of the proposed institution;

13. List of subscribers and proposed members of board of directors and Chief Executive Officer;

14. Proof of citizenship of every subscriber and every proposed directors and senior management officers. This includes detailed curriculum vitae, photocopy of the pages of the passport which contain personal information and two recent passport size photographs;

15. Audited balance sheet, income statement and cash flow for the last three years, of every subscriber who owns five per cent or more of the share capital of the proposed institution engaged in business;

16. Credit reference reports for every significant subscriber and every proposed director and senior management officer;

17. Certified copies of annual returns of every subscriber who owns five per cent or more of the share capital of the proposed institution and every proposed member of the board of directors and Chief Executive Officer together with accompanying schedules or financial statements filed during the last three years with relevant Authority;

18. Certified copies of tax returns of every subscriber who owns five per cent or more of the share capital of the proposed institution and every proposed member of the board of directors and Chief Executive Officer together with accompanying schedules or financial statements filed during the last three years with relevant Tax authorities together with respective Tax clearance certificates;

19. Statements from two persons who are not relatives vouching for the good moral character and financial responsibility of the subscribers who own five per cent or more of the share capital of the proposed institution and the proposed directors and senior management;

20. Home Country Regulator Certification if the applicant is a foreign bank or financial institution;

21. Declaration that the funds to be invested have not been obtained criminally or associated with any criminal activity;

22. Business plan for the first four years of operations including strategies for growth, dividend pay-out policy, career development Programme for the staff and budget for the first year, shall be prepared in line with the guidelines provided in the 4th Schedule of the Banking and Financial Institutions (Licensing) Regulations, 2014;

23. Explicit strategies for outreach through use of branches, agents, mobile banking and other appropriate channels indicating numbers and locations for the first four years;

24. Projected balance sheets, income statements and cash flow statements for the first four years of operation [shall be prepared in accordance with the guidelines provided in 4th Schedule of the Banking and Financial Institutions (Licensing) Regulations, 2014;

25. Brief description of economic benefits to be derived by Tanzania and the community from the proposed bank or financial institution;

26. Draft policies and procedural manuals establishing how the bank or financial institution shall operate in a manner consistent with the principles established in Risk Management Guidelines for Banks and Financial Institutions issued by the Bank;

27. Description of accounting system and information and communication technology to be used in the operations of the institution and proposed future investment;

28. Number of employees, job descriptions of senior management positions and an organization chart;

29. Description of internal control procedures that the bank or financial institution shall implement;

30. Narrative description of shareholders, board and senior management of the bank or financial institution;

31. Plans and strategies for promoting and supporting financial inclusion in the rural areas; and

32. Sources of funds of shareholders and subscribers.