CHAPTER 197
THE BANK OF TANZANIA ACT

 

[PRINCIPAL LEGISLATION]

 

ARRANGEMENT OF SECTIONS

 

   Section

 

Title

 

PART I
PRELIMINARY PROVISIONS

 

   1.   Short title.

 

   2.   Application.

 

   3.   Interpretation.

 

 

 

PART II
THE CENTRAL BANK

 

(a) Establishment and Functions of the Bank

 

   4.   Establishment of Bank.

 

   5.   Functions and objectives.

 

   6.   Monetary policy statements.

 

   7.   Consultation on monetary policy.

 

 

 

(b) Management of the Bank

 

   8.   Board of Directors.

 

   9.   Composition of the Board.

 

   10.   Disqualification for membership and removal from the Board.

 

   11.   Meetings of the Board.

 

   12.   Standing Committee.

 

   13.   Other committees of the Board.

 

   14.   The Governor and Deputy Governor.

 

   15.   Remuneration of the Governor, Deputy Governor and members of the Board.

 

   16.   Other officers and staff of the Bank.

 

   17.   Secrecy.

 

 

 

(c) Capital, Reserve and Accounts of the Bank

 

   18.   Authorised capital.

 

   19.   General Reserve Fund and allocation of profits.

 

   20.   Losses charged on Consolidated Fund.

 

   21.   Financial year, accounts and audit.

 

   22.   Reports.

 

 

 

(d) Supplementary

 

   23.   Offices and branches.

 

   24.   Agents and correspondents.

 

   25.   Exemption from certain taxes.

 

   26.   Companies Act and Companies Decree not to apply.

 

   27.   By-laws.

 

 

 

PART III
CURRENCY

 

(a) Currency and its Issue

 

   28.   Unit of currency.

 

   29.   Sole right to issue bank notes and coins.

 

   30.   Denominations and form of notes and coins.

 

   31.   Legal tender.

 

   32.   Lost and damaged currency.

 

   33.   Tampering with coinage.

 

   34.   Destruction of coins and notes.

 

 

 

PART IV
OTHER OPERATIONS OF THE BANK

 

(a) The Bank as Banker to the Governments and Other Public Authorities

 

   35.   Banker to the Governments.

 

   36.   Functions as banker and fiscal agent.

 

   37.   Direct advances and other short term credit to the Governments, etc.

 

   38.   Operation in Government securities, etc.

 

   39.   Meaning of annual budgeted revenue.

 

   40.   Prohibition of other credit to Government, etc.

 

 

 

(b) Financial Relations with Other Banks

 

   41.   Banker to banks and financial institutions.

 

   42.   Rediscounts, etc.

 

   43.   Loans and advances.

 

   44.   Bank not to extend credit.

 

 

 

(c) Control of Banking

 

   45.   Reserve requirements in respect of banks.

 

   46.   Liquid assets ratio.

 

   47.   Information to be furnished to the Bank.

 

   48.   Power of the Bank over banks and financial institutions.

 

   49.   Penalty.

 

 

 

(d) External Reserves, Gold and Foreign Exchange

 

   50.   Exchange rate policy.

 

   51.   Reserve of external assets.

 

   52.   Dealing in gold and foreign currencies.

 

   53.   Exchange control.

 

   54.   Payments agreements.

 

   55.   Fiscal and depository for Government's transactions with international financial institutions.

 

 

 

(e) Miscellaneous Powers and Functions

 

   56.   Relations with foreign banks.

 

   57.   Relations with corporations.

 

   58.   Interest on deposit balances and blocked accounts.

 

   59.   Advice to Governments.

 

 

 

(f) Prohibited Operations

 

   60.   Prohibited operations.

 

 

 

PART V
GENERAL PROVISIONS

 

(a) General

 

   61.   Limitation on external holdings.

 

   62.   Prohibited banking names.

 

   63.   Banks, etc., deemed to be public service for certain purposes.

 

   64.   Commission for Human Rights and Good Governance to have jurisdiction.

 

   65.   Immunity.

 

   66.   Conflicts.

 

 

 

(b) Repeals and Savings

 

   67.   [Repeal of Act No. 12 of 1966.]

 

   68.   Savings.

 

 

CHAPTER 197
THE BANK OF TANZANIA ACT

An Act to provide for the establishment, constitution and functions of the Bank of Tanzania as a central bank, to provide for the currency of Tanzania, to provide that the Bank shall be the banker to the Governments of the United Republic of Tanzania and the Revolutionary Government of Zanzibar and shall have certain powers in relation to other banks and financial institutions and to provide for related purposes.

[9th October, 1995 *]
[G.N. No. 576 of 1995]

Act No. 1 of 1995

PART I
PRELIMINARY PROVISIONS (ss 1-3)

 

1.   Short title

   (1) This Act may be cited as the Bank of Tanzania Act.

   (2) [Omitted.]

 

2.   Application

   This Act shall extend to Tanzania Zanzibar as well as to Mainland Tanzania.

 

3.   Interpretation

   In this Act, unless the context otherwise requires–

   "the Bank" means the Bank of Tanzania established under section 4;

   "bank" except when used in the expressions "central bank" and "foreign bank", means a financial institution authorised to receive money on current account subject to withdrawal by cheque;

   "banking business" means–

 

   (a)   the business of receiving funds from the general public through the acceptance of money deposits payable upon demand or after a fixed period or after notice, or any similar operation through the frequent sale or placement of bonds, certificates, notices or other securities, and the use of such funds either in whole or in part for loans or investments for business;

 

   (b)   any other activity recognised as customary banking practice which a financial institution engaging in the activities described in paragraph (a) may be additionally authorised to do by the Bank;

   "Director" means a member of the Board other than the Governor, the Deputy Governor, the Permanent Secretary to the Treasury of Tanzania or the Principal Secretary to the Treasury of Zanzibar;

   "financial institution" means any person authorised by or under the Banking and Financial Institutions Act *, to engage in banking business not involving the receipt of money on current account subject to withdrawal by cheque;

   "foreign exchange" means currencies and units of accounts other than the currency of the United Republic and claims in and to such currencies and units of accounts;

   "Governments" refers to the Governments of the United Republic of Tanzania and the Revolutionary Government of Zanzibar;

   "member" in relation to the Board means the Governor, the Deputy Governor, the Permanent Secretary to the Treasury of Tanzania, the Principal Secretary to the Treasury of Zanzibar or a Director;

   "Minister" except where otherwise specified refers to the Minister responsible for financial matters of the United Republic of Tanzania;

   "public authority" means–

 

   (a)   the authority for any political subdivision of the United Republic, including any city, municipal, town or district council;

 

   (b)   any common services authority for which Tanzania is a member with other countries;

 

   (c)   any corporation, agency or enterprise specified for the purposes of this Act by the Bank.

PART II
THE CENTRAL BANK (ss 4-27)

(a) Establishment and Functions of the Bank (ss 4-7)

 

4.   Establishment of Bank

   There shall be established a corporation, to be known as the Bank of Tanzania, which shall–

 

   (a)   have perpetual succession and a common seal;

 

   (b)   in its corporate name be capable of suing and being sued; and

 

   (c)   subject to the provisions of this Act, be capable of acquiring, holding and alienating any movable or immovable property.

 

5.   Functions and objectives

   (1) The principal functions of the Bank shall be to exercise the functions of a central bank, and, without prejudice to the generality of the foregoing, to formulate, implement and be responsible for monetary policy, to issue currency, to regulate and supervise banks and financial institutions and to manage gold and foreign exchange reserves of Tanzania.

   (2) The Bank shall promote sound monetary, credit and banking conditions conducive to the development of the economy of Tanzania.

   (3) The primary objective of the Bank shall be to formulate and implement monetary policy directed to the economic objective of maintaining price stability conducive to a balanced and sustainable growth of the national economy of Tanzania.

 

6.   Monetary policy statements

   (1) The Bank shall at intervals of not more than six months after the submission of each preceding statement, submit to the Minister a monetary policy statement for the next six months or for such other period as may be specified by the Minister.

   (2) The Minister shall submit to the National Assembly not later than at its subsequent session the statement submitted in terms of the provisions of subsection (1).

   (3) The Bank shall thereafter at intervals of not more than six months after the submission of the preceding report submit to the Minister progress reports on the implementation of monetary policy and reports on the outlook for the future, and the Minister shall in turn submit the said reports to the National Assembly at its subsequent session.

   (4) The monetary policy statement to be submitted under this section shall–

 

   (a)   specify the policies and means by which the Bank intends to achieve the policy targets;

 

   (b)   state the reasons for adopting those policies and means;

 

   (c)   contain a statement of how the Bank proposes monetary policy might be formulated and implemented during the next twelve months;

 

   (d)   contain a review and assessment of the implementation by the Bank of monetary policy during the period to which the preceding policy statement relates.

 

7.   Consultation on monetary policy

   (1) There shall be regularly held consultations between the Governments and the Governor on monetary policy.

   (2) In the event of fundamental and irreconcilable differences between the Minister and the Governor over monetary policy, the Minister shall by order published in the Gazette direct the Governor to formulate and implement monetary policy along the position of the Minister for a period not exceeding twelve months or any other period as shall be specified in the order.

   (3) Except as provided under subsection (2) nothing in this section shall be so construed as to limit or affect the obligation of the Bank to carry out its primary objective.

(b) Management of the Bank (ss 8-17)

 

8.   Board of Directors

   There shall be a Board of Directors of the Bank and subject to this Act, the Board shall be responsible for determining the policy of the Bank, for the approval of its budget and for such other functions as are specifically conferred or imposed upon the Board by this or any other written law.

 

9.   Composition of the Board

   (1) The Board shall consist of–

 

   (a)   the Governor, who shall be the Chairman;

 

   (b)   the Deputy Governor, who shall be the Deputy Chairman;

 

   (c)   the Permanent Secretary to the Treasury of the Government of the United Republic and the Principal Secretary to the Treasury of the Revolutionary Government of Zanzibar; and

 

   (d)   six other directors appointed by the Minister.

   (2) The Governor and the Deputy Governor shall be appointed by the President and each shall hold office, unless he sooner dies or resigns or vacates or is removed from his office for good cause or is disqualified, hold office for a period of five years and shall be eligible for re-appointment:

   Provided that no Governor or Deputy Governor shall hold office for more than two terms.

   (3) The Directors appointed by the Minister shall each hold office, unless he sooner dies or resigns or vacates or is removed from his office in accordance with section 10, for a term of three years, and shall be eligible for re-appointment.

This section of the article is only available for our subscribers. Please click here to subscribe to a subscription plan to view this part of the article.