Deposit Guarantee Scheme Tanzania

Information Leaflet – A Deposit Guarantee Scheme Reimburses a Limited Amount to Compensate Account Holders Whose Bank in Tanzania Has Failed

Deposit Guarantee Scheme Tanzania: The Deposit Insurance Board (DIB) protects deposits in banks and deposit taking financial institutions in Tanzania.

Secured Deposit Limit: The maximum coverage is TZS 1.5 million per depositor per bank. Currently, the insured deposits cover 95% of insurable deposit accounts.

Legal framework and procedures: Section 41 of the Banking and Financial Institution Act 2006 gives power to the Bank of Tanzania to appoint DIB as liquidator of failed banks and financial institutions. Insured deposits are paid during the pay-out exercise with the maximum coverage limit of TZS 1,500,000. Depositors and other creditors are subject to liquidation procedures and will be notified about payment of their claims in due course. To facilitate the liquidation of the closed banks and financial institutions (under liquidation), DIB is currently engaging independent Valuation Firms (“Consultants”) to undertake valuation of the assets and the results of the valuation will be used for sale purposes to enable the completion of the liquidation process.

Claim Filing Procedure: The reimbursement of insured deposits to the depositors of defunct banks and other deposit taking institutions is subject to the procedures set forth by the DIB. Such reimbursement of insured deposits incurs at the premises of the DIB in Dar es Salaam or at the head office of failed institution. Exact claim filing procedures and the location to submit a claim is decided on a case by case basis. After their identity is confirmed, claimants submit a claim form supported by claim evidence.

Claim Submission Timeframe: If a bank or deposit-taking financial institution fails, DIB protects the account balances of eligible depositors up to the maximum insured amount. In general, the claim submission timeframe depends on the start of the liquidation of the credit institution.

Scheme Architecture: Every bank or financial institution which is licensed to carry on banking business in the United Republic shall be a contributor to the Fund and shall pay into the Fund such annual amount and at such times, as DIB may determine. The DIB levies and collects premium from banks and deposit taking financial institutions. Currently, the premium assessment rate is 0.15 percent of the annual average total deposit liabilities of each member institution of the Deposit Insurance Fund. The fund has estimated reserves of TZS 435 Billion (approximately 182 million euros) and covers the deposits in 50 financial institutions.

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