Bank of Tanzania dispels Islamic bank closure rumours

Wednesday November 29 2017

Bank of Tanzania.

Bank of Tanzania. The bank has moved to prevent a possible run on deposits at the sharia-compliant Amana Bank after reports circulated on social media of the financial institution’s imminent closure. PHOTO FILE | NMG 

By VICTOR KAREGA
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The Bank of Tanzania has moved to prevent a possible run on deposits at the sharia-compliant Amana Bank after reports circulated on social media of the financial institution’s imminent closure.

BoT Governor Florens Luoga said that Amana Bank and other lenders were stable and there was no cause for panic over deposits.

He said the bank continues with normal operations, and warned those spreading false information about the future of some banks, including Amana, that stern legal action would be taken against them.

Head of marketing and business Dassu Mussa said Amana Bank has “sufficient liquidity.”

“All we can do is to make sure that our business is running efficiently and properly and we are very confident it is doing so. “The rumour is false,” Mr Mussa said.

The EastAfrican has established that Amana branches were open and continued to provide services.

The bank has seven branches in Dar es Salaam, Arusha and Mwanza.

In May this year, BoT revoked the business licence of Mbinga Community Bank due to lack of capital, and placed it under compulsory liquidation. Mbinga, a microfinance institution had operations in Ruvuma in southern Tanzania. Its main customers were farmers.

The lender was licensed in 2003. Its total assets as at 2014 stood at Tsh383.4 million ($171,930).

Similar measures were taken against FBME Bank in July, following a report from the US Treasury’s Financial Crimes Enforcement Network (FinCEN) describing the bank as a “money laundering concern.”

The Tanzanian-registered bank mounted a legal challenge against the claims, but a US court ruled in favour of FinCEN in April, allowing it to shut the bank out of the American financial system.

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