RE-LICENSING OF ALL BUREAU DE CHANGE IN TANZANIA: A COMPLIANCE DIRECTIVE FROM THE BANK OF TANZANIA.
The Bank of Tanzania (BoT) on 21st June 2017 issued a directive to all bureau de change to comply with the re-licensing procedures that were announced.
On that directive, among other issues Bank of Tanzania is undertaking measures aimed at strengthening supervision of operations of Bureau de Change in the country to ensure a vibrant and dynamic foreign exchange market in line with current economic developments.
The directive further revised the minimum capital thresholds, from Tanzanian Shillings 100 Million to Tanzanian Shillings 300 Million for Class A and from Tanzanian Shillings 250 Million to Tanzanian Shillings 1 Billion for Class B as well as increase of the non-interest bearing deposit at Bank of Tanzania from United States Dollars 50,000 to United States Dollars 100,000. The new capital threshold will take effect three months from 2nd June 2017 as per the Government Notice Number 223 published on 2nd June 2017.
In implementing the measures and assessing compliance, the existing Bureau de Change have been informed and directed to observe and comply to the following requisite directives:
- Licensing of new Bureau de Change have been suspended until further notice to enable assessment and re-licensing of the existing Bureau de Change;
- All existing Bureau de Change are required to apply for re-licensing by filling the required forms within the moratorium period of three months;
- No person shall become a shareholder, a director, a member of management or a staff in more than one Bureau de Change;
- At least two thirds of the required minimum capital should be in form of cash as a working capital;
- Notwithstanding the security requirements specified in the Foreign Exchange (Bureau de Change) Regulations, 2015, all bureau de change outlets should be fitted with CCTV Cameras in all strategic areas including teller cubicles;
- Every shareholder, director and Heads of Branches are required to fill the “Fit and Proper Person Form” and authenticate the source of funds invested in the Bureau de Change; and
- Every Bureau de Change is required to fill and submit the “Premises Aptness Checklist”. The Bank of Tanzania through site visits will then verify the contents of the filled form.
The Bank of Tanzania urge for smooth implementation of the above measures, Bureau de Change are encouraged to merge, acquire or be acquired by another Bureau de Change, however, merger, amalgamation or acquisition of Bureau de Change shall require prior approval of the Bank and such request shall have to be accompanied by Board Resolution, Pro-forma Balance Sheet, Pro-forma Income Statement and Organization Structure resulting from the merger, amalgamation or acquisition.
FURTHER INFORMATION:
This editorial is intended to give you a general over view of the Law. If you would like further information on any issue raised in this column, please contact.
Patrick Sanga
Partner
E: p.sanga@vemmaattorneys.co.tz
M: +255 686 999 993
Haika-Belinda Macha
Partner
E: hb.macha@vemmaattorneys.co.tz
M: +255 688 305 999