The Bank of Tanzania (BoT) has placed Bank M under receivership for failure to meet its debts.

The central bank Governor Prof Florens Luoga said Thursday that the lender failed to keep minimum reserves of Tsh50 billion ($21.9 million).

"The decision to take over the bank follows determination by the Bank of Tanzania that Bank M has critical liquidity problems and is unable to meet its maturing obligations," BoT said in a statement on Thursday.

The central bank also suspended Bank M's board and management and appointed a statutory manager.

"Continuation of the bank's operations in the current liquidity position is detrimental to the interests of depositors and poses a system risk to the stability of the financial system," BoT said.

The bank's operations have been closed for up to 90 days as BoT determines an appropriate resolution option.

The mid-sized Tanzanian lender owns Kenya’s M Oriental Bank which it acquired in 2016.