BOT encourages usage of cashless transactions

The Bank of Tanzania (BoT) has issued a circular to banks and financial institutions to submit daily reports on over the counter cash withdrawals by customers.

The circular aimed at minimising hard cash usage and encouraging cash payment.

The central bank directive started 7th September 2020.

BoT has undertaken various initiatives to minimise usage of hard cash in carrying out transactions.

According to BoT, this is in tandem with global financial market developments, and in consideration of benefits of a less cash economy.

Measures that have so far been executed in the country as part of the initiatives toward a less cash economy include development of Tanzania Interbank Settlement System (TISS) for facilitation of government payments, government revenue collection, and inter-bank fund transfers; East African Payment System to facilitate fund transfers within the East African region; SADC Integrated Regional Electronic Settlement System to facilitate fund transfer and settlement within SADC region; Tanzania Automated Clearing House; Electronic Fund Transfer and Card Switches.

Other measures include licensing ofMobile Network Operators (MNOs) offer mobile financial services with a view to encourage usage of electronic money as opposed to cash.

“It is worth noting that, apart from advancing financial inclusion digital payments reduce the cost of providing financial services to the poor, increase safety and convenience, reduce government expenditure associated with printing and distribution of currency,” said the central bank.

The lenders regulator noted that the essence of the circular letter to banks and financial institutions was therefore to enable the central bank gather information that will facilitate assessment of impact of measures towards less cash economy as indicate above and determine additional policy, legal and technological measures required for further advancement towards this objective.