Tanzania central bank announces new capital rules, orders banks to cut bad loans

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DAR ES SALAAM – Tanzania’s central bank announced new rules on Tuesday for capital conservation buffers, a move that will force banks to hold more capital to withstand financial shocks following a sharp rise in non-performing loans.

“The minimum core and total capital ratios will remain 10 percent and 12 percent respectively … but banks and financial institutions shall be required to maintain a capital conservation buffer of 2.5 percent of risk-weighted assets and off-balance sheet exposures,” the central bank said in a monetary policy statement.

(Reporting by Fumbuka Ng’wanakilala; Writing by Aaron Maasho; Editing by Hugh Lawson)

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