BoT fines lenders for violating anti-money laundering laws

BoT aerial view
An aerial view of the Bank of Tanzania. PHOTO/COURTESY:

The Bank of Tanzania (BoT) has issued five lenders operating in the country a combined Ksh. 85.01 million fine for failing to adhere to set anti-money laundering rules.

The five banks include: I&M bank which was fined Ksh. 29.58 million, Equity Bank Tanzania which was fined Ksh. 26.2 million and Africa Banking Corporation whose fine amounts to Ksh. 6.55 million. Also penalized were Tanzania based lenders United Bank Limited and Habib African bank. The two lenders were issued with a Ksh. 14.68 million and Ksh. 7.9 million respectively.

According to BoT, the aforementioned lenders did not file suspicious transaction reports to the Financial Intelligence Unit (FIU) nor did they conduct proper customer due diligence during the transactions in questions.“BoT has imposed monetary penalties to five banks for breach of regulations 17,22 and 28 of the Anti-money laundering Regulations, 2012 for failure to report suspicious transactions to FIU and not conducting proper customer due diligence,” the Bank of Tanzania said in a statement.

BoT similarly urged the aforementioned banks to take appropriate action against the banks’ employees who participated in opening of implicated deposit accounts contrary to Know Your Customer (KYC) requirements within the next three months. The KYC requirements were introduced by BoT in 2015, as a legal requirement for banks to comply with Anti-Money Laundering (AML) laws.

“The Bank of Tanzania wishes to remind all banks and financial institutions to ensure compliance with laws, regulations and directives issued at all times,” the BoT statement read in part.

The move by BoT mirrors a 2018 decision made by the Central Bank of Kenya to fine local lenders Equity Bank, Standard Chartered Bank, KCB, Co-operative Bank and Diamond Trust Bank Kenya a combined Ksh. 310 million for handling National Youth Service funds worth Ksh. 9 billion siphoned from the state.

The fines were based on the lenders’ failure to report the large transactions and conduct due diligence on customers.


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