Yetu Microfinance Bank assets and liabilities transferred to NMB Bank as regulatory challenges persist

The Bank of Tanzania (BoT) as per its mandate as provided under Section 59 (4) of the Banking and Financial Institutions Act, 2006 has completed  the process of determining the resolution option of Yetu Microfinance Bank Plc  and transfer of assets and liabilities to an existing bank has been adopted as the formal resolution option effective 24th May 2023.

Consequently, as mandated under Section 58(2) (h) of the Banking and Financial Institutions Act,

2006, the Bank of Tanzania has, under acquisition by operation of the law transferred all assets and liabilities of Yetu Microfinance Bank Plc to NMB Bank Plc.

“Depositors and other creditors of Yetu Microfinance Bank Plc will be advised in due course how and when they will commence accessing banking services through NMB Bank Plc,” BoT said in a statement

Meanwhile, all borrowers are required to continue paying their maturing obligations as per the terms and conditions of the agreements.

“The Bank of Tanzania reiterates its commitment to protect the interests of depositors, creditors and maintain the stability of the banking sector,” the statement said.

The Central Bank took administration of Yetu Microfinance Bank Plc effectively from December 12, 2022 following determination that the bank had critical liquidity and capital problems.

Following the takeover, Bank of Tanzania suspended normal business operations of Yetu Microfinance Bank Plc for a period of ninety days to allow the Bank to determine appropriate resolution option.

The Central Bank also suspended the bank’s board of directors and management and appointed a statutory manager to manage the affairs of the bank.

The bank was not allowed to open for normal business for a period of the 30 days extended during which BOT would determine an appropriate resolution option.

The last time BOT put a bank under administration was in 2020 when it took over and placed China Commercial Bank Limited (CCB) under statutory administration following the bank’s failure to meet regulatory requirements regarding capital adequacy.