Tanzania’s central bank has put Twiga Bancorp in receivership for lack of adequate capital.
The Bank of Tanzania (BoT) governor Benno Ndulu, addressing a press briefing in Dar es Salaam on Friday, said that Twiga will remain open for only a week.
“The undercapitalised institution poses a risk to the financial sector and the continuation of Twiga Bancorp's operations could threaten the interests of its depositors,” Prof Ndulu said.
BoT has also suspended the board of directors and the senior management team, and has appointed a statutory manager to take over operations.
In July this year, the government commissioned a study to look into options of equity investment after the bank was reported to have been facing liquidity issues.
Twiga Bancorp Limited was licensed in 1998 by the regulator as a non-bank financial institution under the Banking and Financial Institutions Act, 1991.
The government-owned Twiga was permitted to undertake all banking transactions expect taking deposits on current accounts.
In Uganda, barely a week ago, the central bank took over control of Crane Bank due to a financial crisis that left the lender without adequate capital.