Tanzania's Central Bank cancels licences for 5 banks

Tanzania's central bank has cancelled licences for five banks and placed them under receivership.

The Bank of Tanzania (BoT) said the lenders breached core capital rules.

The banks are Covenant Bank for Women, Efatha Bank Limited, Njombe Community Bank Limited, Meru Community Bank Limited, and Kagera Farmers’ Cooperative Bank Limited.

"The aforesaid banks are critically undercapitalised," BoT said, adding that "continuation of their operations in their current position is detrimental to the interest of depositors and poses a risk to the stability of the financial system."

The move comes three weeks after President John Magufuli ordered the regulator to take action against banks with inadequate capital.

“We have 58 banks in Tanzania. We want the banking regulator to take action against the failing institutions. We would rather have a few viable banks than many failing ones,” the president said.