Failure to conduct proper customer due diligence and file suspicious transaction reports to the Financial Intelligence Unit (FIU) have cost five commercial banks among them Kenya’s Equity Group and I&M Bank, over $800,000 for breaching anti-money laundering rules.
Bank of Tanzania slapped I&M Bank with the biggest fine at TSh655 million (Ksh29.62 million), followed by Equity Bank (TSh580 million), UBL Bank (Tsh325 million), Habib African Bank (Tsh175 million) and African Banking Corporation (Tsh145 million).
International Monetary Fund in December said that nearly half of Tanzania forty-five banks were vulnerable to adverse shocks and risked insolvency in the event of a global financial crisis.
The sanctioned banks had been given three months by the regulator to implement various anti-money laundering measures, which include taking disciplinary action against all staff members who were involved in opening implicated deposit accounts contrary to Know Your Customer requirements.
Prior to that, Tanzania Central bank had given all banks and financial institutions, 90 days to establish primary data centres in the East African nation, saying it will impose hefty fines on lenders that fail to comply, tightening its regulatory oversight over commercial banks and other financial institutions for the past few years.
The named banks are yet to officially respond to the matter.