BOT issues guidelines to facilitate mobile banking services

As Commercial banks are striving to extend their services closer to the people through mobile banking services in the country, the Bank of Tanzania (BOT) has issued guidelines on agent banking for banking institutions in a bid to quicken the process. It has been learnt. The BOT guidelines to be applied to all banking institutions through their agents would help to expand and facilitate their move as in accordance to financial regulations which are made under section 71 of the banking and financial institutions Act of the year 2006. The guidelines which have been issued with effect from February 2013 by the Directorate of the Banking at the BOT, are clearly specified in a 20 paged report book a copy of which has been made available last week in Dar es Salaam. The report which contains ten main topics in it says that, the objectives of these guidelines is to provide a framework for conducting agent banking business in the country as a delivery channel for offering banking services in a cost-effective manner. In the report, the issued guidelines clearly instructs the banking institutions on the proper ways to follow how to get agents who would work on behalf of their banking activities and also to adhere to the rules and regulations set under financial Act 2006.  The report has given a summary of the detailed instructions to be followed by commercial banks and is preceded by the main topics which are illustrated and outlined into details under sub-topics given thereafter. An example of some of the few but important points is in the third topic of the guideline which connotes the approval process and permissible activities which states that, “a banking institution seeking to conduct agent banking business shall be accompanied by the documents listed in the schedule within thirty days following the receipt of an application to engage in agent banking”. However, BOT shall review the application and an approved banking institution which should engage in the most important banking activities that involves cash deposit and cash withdrawal, facilitate cash disbursements and payments and transfer of funds which according to the stipulated Act, the transactions shall not be carried out in currencies other than Tanzania shillings.

On agent eligibility, the guidelines notes that, a person intending to be appointed as an agent is required to have operated a lawful commercial activity for at least two years preceding the date of the application to become an agent and that such a commercial entity must be in full operation. The guidelines further notes that, a banking institution seeking to contract a person who has already been contracted by another banking institution to carry out agent banking, shall assess the capacity of the agent to manage transactions for different institutions in terms of space. However, an approved banking institution shall select capable and reliable agents by establishing internal selection criteria to ensure that the agents are able to discharge duties responsibly and with knowledge, capability and competency to conduct agent banking services at an acceptable quality. Coupled by the introduced BOT guidelines, some bank customers in the city of Dar es Salaam have appreciated the move when interviewed by this paper on Monday this week. Ayoub Kaswani (42) a customer with the NMB Bank said that, mobile banking activities in the country would help ease the long queue which is seen at most banks as common phenomenon especially in the city of Dar es Salaam. He says that, most bank customers are disappointed especially during end of the months’ periods when banks are flocked and the service counters becomes busy an aspect that, it takes time for a customer to be served quickly and on time.  However, An economist, Consolata Masalu noted that, mobile banking activities would help quicken the economy as there will be a quick circulation of money, compared as at a present time when far flung people especially in rural vicinity banking activities are very scarce, thus banks do not get enough money to run national economy. However, she has suggested that, the BOT who regulates the activities of the commercials banks in the country to take a quick move and make it as a force to commercial banks which out of the registered 46 banks in the country, about 90 percent of them operates in Dar es Salaam city alone. “This is not the way to mobilize the country’s economy as most people keeps their money at home” she said adding that, if money is not circulating properly, it results into higher inflation rate as the major sources of the national economy would lack money.