Yetu Microfinance depositors move to NMB Bank
BoT placed Yetu microfinance under statutory administration for 3 months. PHOTO | COURTESY
What you need to know:
- This is the second time within two years that NMB Bank Plc is coming to the rescue of financial institutions that have had their operations suspended due to capital adequacy levels as the consolidation continues in the banking sector.
Dar es Salaam. The depositors and other creditors of Yetu Microfinance Bank Plc will soon start accessing banking services through NMB Bank, thanks to a decision for the transfer of assets and liabilities by the banking sector regulator.
The Bank of Tanzania (BoT) announced on Tuesday that it was transferring the assets and liabilities of Yetu Microfinance Bank Plc to NMB Bank Plc as a formal resolution option for the suspended microfinance outfit.
In December, 2022, the BoT placed Yetu Microfinance Bank under statutory administration following the company’s failure to meet regulatory requirements regarding liquidity and capital adequacy.
“To permit Yetu Microfinance Bank to continue with banking operations while under a state of shortage of liquidity and undercapitalisation is detrimental to the interest of depositors and poses a systemic risk to the stability of the financial system,” the BoT said in December last year.
As such, the BoT suspended the bank’s board of directors and management and appointed a statutory manager to manage the affairs of the bank. During the period, the bank was not permitted to open for normal business pending the determination of an appropriate resolution option.
And on Tuesday, the BoT said that, working in line with Section 59 (4) of the Banking and Financial Institutions Act, 2006, it had completed the process of determining the resolution option of Yetu Microfinance Bank Plc and transferred the assets and liabilities to NMB Bank Plc. “Depositors and other creditors of Yetu Microfinance Bank Plc will be informed in due course.
“Of course, how and when they will commence accessing banking services through NMB Bank Plc,” the BoT says, calling upon all borrowers to continue paying their maturing obligations as per the terms and conditions of the agreements.
This is the second time within two years that NMB Bank Plc is coming to the rescue of financial institutions that have had their operations suspended due to capital adequacy levels as the consolidation continues in the banking sector.
In March, 2021, the BoT also transferred all assets and liabilities of China Commercial Bank Limited (CCB) to NMB Bank Plc.
That came four months after the BoT took over and placed the CCB under statutory administration after it failed to meet regulatory requirements regarding capital adequacy.
