Tanzania
Banking and Financial Institutions Act
Liquid Assets Ratio Regulations, 2001
Government Notice 104 of 2001
- Published in Tanzania Government Gazette
- Commenced on 1 September 2000
- [This is the version of this document at 31 July 2002.]
- [Note: This legislation has been thoroughly revised and consolidated under the supervision of the Attorney General's Office, in compliance with the Laws Revision Act No. 7 of 1994, the Revised Laws and Annual Revision Act (Chapter 356 (R.L.)), and the Interpretation of Laws and General Clauses Act No. 30 of 1972. This version is up-to-date as at 31st July 2002.]
Part I – Preliminary provisions (regs 1-3)
1. Short title
These Regulations may be cited as the Liquid Assets Ratio Regulations.2. Application
These Regulations shall apply to all licensed banks and financial institutions.3. Interpretation
In these Regulations, unless the context otherwise requires—"the Act" means the Banking and Financial Institutions Act 1;"borrowing from the general public" means obtaining funds through the frequent sale, placement or issuance of bonds, certificates, notes bills of exchange instruments or any other securities, excluding interbank borrowings, borrowings from the Bank, special deposits or borrowings from the Government for on lending to specified priority sectors, and other modes of borrowings as the bank may deem fit;"chronic deficiency in liquid assets" means deficiency or shortfall in the minimum required amount of liquid assets occurring in three consecutive weekly reporting periods;"demand liabilities" means current accounts, time deposits, savings deposits, deposits of banks, interbank borrowings payable at call or within seven days, banker's cheques and drafts issued, payment orders and transfers payable, foreign currency deposits and borrowings, other deposits, off balance sheet commitments maturing within one year and such other liability payable on demand as the Bank may deem fit;"liquid assets" include cash on hand, current account balances and currency deposits with the Bank of Tanzania as shown in the books of the Bank, balances with other banks with maturities of seven days or less or withdrawable on demand, cheques and items for clearing, foreign currency notes and coins including gold, treasury bills and other government securities maturing within one year and as long as they are unencumbered, commercial bills and promissory notes discounted at the Bank and such other assets as the Bank may include from time to time;"loan portfolio" means outstanding loans, advances, overdrafts, notes or bills discounted, export bills purchased, import bills, customer's liability on acceptances, or any other credit extended by a bank or financial institution excluding the undrawn or unveiled line of credit or contingent commitments;"other deposits" means funds received from customers by way of deposits which are not in the books of the depository bank or financial institution as either current, time or savings deposits.Part II – Liquidity management (regs 4-7)
4. Liquidity and funding policies
The Board of every bank and financial institution shall be required to–5. Cash flows measurement
Every bank and financial institution shall accurately measure:6. Internal inspection and audit
Every bank and financial institution shall intensify its internal inspection and audit for testing all aspects of liquidity management in order to–7. Submission to board of directors
Every bank and financial institution is required to submit to the board of directors assessment of liquidity position on a timely and regular basis.Part III – Required minimum liquid assets and maximum loans to deposits ratio (regs 8-11)
8. Liquid asset ratio
Every bank and financial institution shall maintain minimum liquid assets equivalent to not less than twenty percent of its demand liabilities as set out in the First Schedule hereto.9. Qualifying balances with banks abroad
In determining total liquid assets as set out in the Second Schedule, balances with banks abroad will only qualify if they are withdrawable on demand and those that mature within 7 days, provided that they are in currencies which are freely convertible in international and exchange markets.10. Computation and submission
11. Maximum loans to deposits ratio
Every bank and financial institution shall maintain at all times its gross loan portfolio at levels not exceeding eighty percent of its total depository liabilities, inclusive of deposits of banks and foreign currency deposits.Part IV – Administrative sanctions and penalties (regs 12-14)
12. Penalties
Any bank or financial institution which—13. Recovery of penalty
The penalty levied under regulation 12 shall be recovered as a civil debt or by deducting from any balance of moneys owing to that bank or financial institution.14. Additional sanctions
The penalty levied on any bank or financial institution under regulation 12 shall be without prejudice to other sanctions which the Bank may impose on account of chronic liquidity deficiency or any persistent violation of these regulations such as, but not limited to, the following sanctions, namely—Part V – Cancellation (reg 15)
15. Cancellation
[Cancels Circular No. 4 on Required Minimum Liquid Assets and Maximum Ration of Loans to Deposits.]History of this document
31 July 2002 this version
Consolidation
01 September 2000
Commenced