Bank of Tanzania clarifies order on cash withdrawals over the counter
What you need to know:
- The central bank played down the speculations, stressing it was only gathering information to assess progress to a cashless economy in Tanzania.
Dar es Salaam. The Bank of Tanzania (BoT) yesterday clarified its directive on monitoring cash movements, stressing that the process aims at determining Tanzania’s progress towards a cashless economy.
Last month, the central bank issued a circular asking banks and other financial institutions to submit daily reports on over the counter cash withdrawals by customers starting from September 7, 2020.
However, the statement was received with mixed feelings and sparked debates on various social media platforms. It also brought speculations that the BoT was either monitoring capital flight ahead of the 2020 General Election or tightening possible financing routes for the political opposition.
The central bank played down the speculations, stressing it was only gathering information to assess progress to a cashless economy in Tanzania.
“The essence of the circular to banks and financial institutions was, therefore, to enable BoT to gather information which would facilitate assessment of impact of measures towards the cashless economy and determine additional policy, legal and technological measures required to further advance towards this objective,” the central bank stated.
The central bank said it has taken measures towards a cashless economy, which include the development of Tanzania Interbank Settlement System for facilitation of government payments, government revenue collection and inter-bank fund transfers.
Others are the East African Payment System to facilitate fund transfers within the region; Sadc Integrated Regional Electronic Settlement System to facilitate fund transfer and settlement within the bloc.
“The measures also include the Tanzania Automated Clearing House, Electronic Fund Transfer and Card Switches while other measures include licensing of Mobile Network Operators to offer mobile financial services with a view to encouraging usage of electronic money as opposed to cash,” reads part of the statement.
It stressed as part of financial sector development endeavours various initiatives have been undertaken to minimise the use of hard cash in carrying out transactions. The central bank stated that, apart from advancing financial inclusion, digital payments reduce costs of financial services to the poor, increase safety and convenience; reduce government expenditure on printing and distributing currency.
“The BoT wishes to assure the public that the study on a cashless economy is aimed solely for the purpose mentioned therein - and that the information gathered will be treated with utmost confidentiality,” the statement says.
