Tanzania’s central bank has suspended five banks from trading in the interbank foreign exchange market for one month for breaching regulatory rules, a senior official said on Wednesday.
Barclays Bank Tanzania, Exim Bank, UBA Bank, BancABC and Azania Bank were all suspended from the market on Nov 23 for violating the market’s code of conduct, said Alexander Ng’winamila, the director of financial markets at the central bank.
“The suspended banks... either traded at off-market rates and/or did not submit to the central bank the transactions they made ... contrary to the requirements of the code of conduct,” Ng’winamila told Reuters.
Barclays Tanzania, a unit of South Africa’s Absa, confirmed the suspension, adding it was working with the regulator to resolve the issues.
The lender was still continuing to serve its FX clients but it had lost its access to the liquidity offered by the interbank market, it added.
UBA and BancABC were not immediately available for comment.
Tech challenges
Gilbert Mwandimila, Treasury director at Azania, said technological challenges had led to the delay in reporting FX deals in the market.
He said the month-long suspension would adversely impact the lenders’ ability to serve their customers.
Stanley Kafu, head of marketing and communications at Exim Bank Tanzania, told Reuters that Exim’s suspension applied to trading the US dollar-Tanzanian shilling pair only.
“We are allowed to trade all other major currencies and we are also allowed to participate in all dealings in interbank open market operations,” he said.
The suspension comes after the regulator conducted surprise inspections of foreign exchange bureaus in the northern town of Arusha, a tourist and gemstone trading hub.
There are more than 40 commercial banks operating in the East African nation.
