The Bank of Tanzania (BoT) has taken over Bank M Tanzania Plc due to critical liquidity concerns and the lender’s inability to meet maturing obligations.
“Continuation of the bank’s operations in the current liquidity condition is detrimental to the interests of depositors and poses systemic risk to the stability of the financial system,” a statement by the Tanzanian central bank said on Thursday.
The regulator has also suspended Bank M’s management and board of directors, and has appointed a Statutory Manager for the bank. Pending the determination of an appropriate resolution, Bank M will not open for normal business for up to 90 days.
The collapse of Bank M is the latest in a recent wave of bank failures that has started in Africa. On Wednesday, five banks were merged in Ghana due to insolvency and obtainance of banking licences under false pretence. More banks may fail on the continent as central banks across the continent tighten regulations to ensure financial stability and adequate support for their growing economies.