Premier orders Mghwira to stop sale of KNCU property

Dar es Salaam. Prime Minister Kassim Majaliwa has ordered Kilimanjaro Regional Commissioner Anna Mghwira to intervene and halt plans by the Kilimanjaro Native Cooperative Union (KNCU) to sale some of its property.

He made the order on Thursday following the decision made by KNCU Board of selling part of its land with the view of raising running capital for its Kilimanjaro Co-Operative Bank Limited (KCBL) to meet the threshold established by the Bank of Tanzania (BoT) to avoid revocation of its banking licence.

KCBL is required to boost its capital to meet the minimum runing capital requirement of the BoT for community banks, which is Sh5 billion.

According to a statement sent to media outlets yesterday by Prime Minister’s Office, Mr Majaliwa issued the order while addressing a public rally at Serengeti public square in Tarime District.

The statement quoted Mr Majaliwa as saying that it was currently prohibited for KNCU to sell its property because the government was in the middle of verifying assets under cooperative unions countrywide.

“The government is committed to ensuring that cooperative unions are strengthened and made competitive again,” the Premier said.

According to the statement, once the verification process is finalised, legal measures, including being taken to court, would be taken against all those who sabotaged the cooperative unions.

On January 4, the central bank issued a six-month ultimatum to three banks to raise their operating capital to the minimum statutory levels or risk having their licences revoked.

The other banks are Tanzania Women’s Bank and Tandahimba Community Bank Limited.

On January 4, BoT revoked licences of five banks for failure to meet the required minimum operation capital.

The banks included Covenant Bank for Women, Efatha Bank Limited, Njombe Community Bank Limited, Meru Community Bank Limited, and Kagera Farmers’ Cooperative Bank Limited.