Bank of Tanzania (BoT) has placed Bank-M Tanzania Plc (Bank M), connected to a Kenyan bank, under statutory management after it emerged yesterday that the institution had liquidity problems and was unable to meet its financial obligations.
This is the sixth bank being placed under receivership this year alone in Tanzania. Five others had been placed under statutory management in January.
The other five banks which have been closed due to liquidity issues include Covenant Bank for Women Ltd, Efatha Bank Ltd, Njombe Community Bank Ltd, Kagera Farmers’ Cooperative Bank Ltd and Meru Community Bank Ltd.
A statement issued by BoT said the continuation of Bank-M’s operations in that condition was detrimental to the interest of depositors and poses a systematic risk to the stability of the financial system.
“BoT has appointed a statutory manager to manage the affairs of Bank-M and suspended its board of directors and management,” the statement reads in part.
BoT has also said that Bank-M will not open for a period of 90 days (three months) during which the Central Bank of Tanzania will determine an appropriate resolution option.
The bank has similar shareholders with a Kenyan financial institution. According to the statistics, M-Holdings has 33.9 per cent – equivalent to 42,281,893 million shares in M-Oriental Kenya.
Other shareholders of M-Oriental include Pasha Investments Ltd with 7.7 per cent and Nalinkumar Shah with 6.5 per cent. Various shareholders of Bank-M Tanzania own M-Holdings, which owns 33.9 per cent in M-Oriental Bank.