According to data from the Bank of Tanzania, the maximum reimbursements for depositors of liquidated banks have been increased from 1.5m/- to 7.5m/-, effective from February 1, 2023. This move was made in response to public outcry over the previous amount being too little. The announcement was made by the Director of Deposit Insurance Board (DIB), Mr. Isack Khiwili, at a Bank of Tanzania and Zanzibar Editors engagement seminar held in Zanzibar. Mr. Khiwili stated that the changes would exclude victims of already liquidated banks, most of whom had been paid before the new arrangements. However, there are still some depositors who have not yet collected their money, with over 1.86bn/- remaining uncollected as of December 31st, 2022. Section 41 of the Banking and Financial Institution Act 2006 empowers the Bank of Tanzania to appoint DIB as the liquidator of failed banks and financial institutions. Since its establishment, the DIB has been appointed to liquidate nine banks, including Greenland Bank (T) Ltd, Delphi’s Bank (T) Ltd, FBME Bank Ltd, Mbinga Community Bank PLC, Njombe Community Bank Ltd, Meru Community Bank Ltd, Covenant Bank for Women Ltd, Kagera Farmers’ Cooperative Bank, and Efatha Bank Ltd. “We ask depositors who have not collected their pay-out to come for it, as we continue with further liquidation procedures to pay other depositors and other creditors with bigger deposits,” Mr. Khiwili said, as he explained the status of the 6,660 FBME depositors claiming more than 341bn/-. The DIB's responsibility is to protect depositors’ funds against loss arising from the failure of a bank or deposit-taking financial institution to the extent provided by the law, in order to maintain depositors’ confidence in the banking system.
This move by the Bank of Tanzania is an important step towards protecting depositors' funds and maintaining confidence in the banking system. With the new guidelines in place, depositors can rest assured that their funds are better protected in the event of a bank or deposit-taking financial institution's failure.