From MarketWatch By Robert Powell December 14, 2013 Larry Kotlikoff, a professor at Boston University...
Government Notice No. 373 on Banking and Financial Institutions (Capital Adequacy) Regulations
(enacted in 2008)
Government Notice No. 373 on Banking and Financial Institutions (Capital Adequacy) Regulations of 2008 provides capital adequacy requirements for all licensed banks and financial institutions in Tanzania.
The principal objective of this regulation is to protect depositors by enhancing banks and financial institutions’ capability to absorb unexpected losses, minimizing the incidence of bank failure. This regulation applies to all banks and financial institutions, except for microfinance companies (MFCs) and financial cooperatives (FICCOs), regulations for which are provided in Regulation on Microfinance Companies and Microcredit Activities (Government Notice No. 80 of 2004) and Regulation on Financial Cooperative Societies (Government Notice No. 81 of 2005).
The regulation discusses:
- Minimum capital for banks, financial institutions, community banks, MFCs and FICCOs;
- Capital adequacy ratios;
- Risk weighted assets and off-balance sheet items;
- Subordinated debt;
- Hybrid instruments or preferred stock;
- Application on solo and consolidated basis;
- Remedial measures;
- Capital for market risks;
- Exemption from market risk requirements;
- Trading book;
- Computing capital adequacy ratio;
- Reporting capital adequacy;
- Market risk exposure report;
- Independent auditor’s statement; and
- Sanctions and penalties.