The Central Bank of Tanzania has issued a new circular that mandates all financial institutions in the country to establish local data centres within three months.

The decision comes just a month after it fined local lender Diamond Trust Bank for violating regulatory rules on data and service availability.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

In the new circular, the central bank directed the banks to set up local data centres instead of using foreign servers.

Additionally, it will impose hefty fines on the lenders which fail to set up local data centres by the stipulated time.

According to the circular, a fine of TZS500m ($0.22m) per month will be imposed on the lenders till they comply with the requirement.

Since 2014, the authority has issued three such circulars; however, several lenders are yet to comply, reported Reuters.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Central Bank of Tanzania deputy governor Bernard Kibesse was quoted by the news agency as saying: “The bank of Tanzania has noted with serious concern that most of the banks and financial institutions have not provided a true position on compliance with the requirements to put in place a primary or secondary data centre in Tanzania.”

In the recent years, Tanzania has strengthened regulatory oversight over banks following misconducts and increase in bad loans.

In December last year, the International Monetary Fund (IMF) said that around half of the local banks in Tanzania face the risk of insolvency.

Following solvency stress tests, IMF found that 22 out of Tanzania’s 45 banks will become undercapitalised in a tail risk scenario.

Additionally, the Central Bank of Tanzania has cancelled nine bank licences since 2017 to ensure stability.