This archive report was first published on 29 August 2019.
On August 29, 2019, the Bank of Tanzania fined National Bank of Commerce Ltd Sh45 million for failing to establish a data centre, the second bank in two months to be penalised for such a breach.
The central bank had directed banks and financial institutions in 2014 to establish primary or secondary data centres in Tanzania, warning of hefty fines for non-compliance as it tightened regulatory oversight of the sector.
The country's financial services sector has been hit by a spike in bad loans, which have stifled the growth of credit to the private sector.
According to Reuters, the central bank fined Diamond Trust Bank Tanzania Limited 1 billion shillings last month for breaching the regulatory rules on data and service availability.
It issued a new directive last week that all banks and financial institutions must now establish a primary data centre within three months or face an increased fine of 5 billion shillings.
“The Bank of Tanzania has imposed a penalty charge of one billion shillings to National Bank of Commerce Limited for failure to implement directives to establish either a primary or secondary data centre in the country,” the central bank said in a statement.
“In addition to the penalty explained above, an additional charge of 10 percent of the penalty amount will be imposed to NBC for every month in which the non-compliance continues,” it added.
NBC, majority owned by South African lender Absa, was not immediately available for comment.
