BoT places China Bank under receivership

Pursuant to powers conferred upon the Bank of Tanzania (BoT) under Section 56 (1)(g)(i) and (iii) of the Banking and Financial Institutions Act, 2006, the Bank of Tanzania has effective from 19th November 2020, taken over and placed under receivership the China Commercial Bank Limited.
The decision to take over and place China Commercial Bank Limited under statutory administration follows the failure of the Bank to meet regulatory requirements regarding capital adequacy.
Thus, to permit the CCBL to continue with banking operations while under the state of undercapitalisation is detrimental to the interests of depositors and poses systemic risk to the stability of the financial system.
The BoT has appointed a Statutory Manager to manage the affairs of CCBL and suspended its Board of Directors and Management.
The small lender is owned by Tanzanian and Chinese shareholders. It was licensed in 2015 and is among 36 lenders registered in Tanzania as fully-fledged commercial banks.
The Bank’s total deposits fell 79 per cent by the end of 2018 to Tsh3.98 billion ($1.72 million), while assets declined by 65 per cent to Tsh12.8 billion, according to central bank data. It had one branch and 19 employees as of 2018.
President John Magufuli’s government has been pushing for consolidation of local banks. The central bank has revoked the li- censes of at least nine lenders over the past three years to safe- guard stability of the industry.
The International Monetary Fund warned in a 2018 report that nearly half of Tanzania’s 45 banks were vulnerable to adverse shocks and risked insolvency in the event of a global financial crisis
In the premises, the Bank will not be open for normal business for a period not exceeding ninety days during which the Central Bank will determine an appropriate resolution option.
The BoT assures the public that it will continue to protect the interests of depositors and maintain stability of the banking sector.