The Bank of Tanzania (BoT) has said the process of migrating from traditional supervision approach to Risk Based Supervision (RBS) has reached an advanced stage. BoT has already finalized the Risk Based Supervision Framework.
This provides a detailed description of the Risk Based Supervision framework to be adopted by the Bank of Tanzania for supervision of banks and financial institutions,? the 2006 annual report by the Directorate of Banking Supervision noted.
During the year under review, the Directorate reviewed Risk Management Programmes (RMPs) submitted by banks and financial Institutions.
?The Directorate of Banking Supervision continued to rank high on its agenda the objective of ensuring that the country has safe, stable and sound banking system,? said its director, Mkila, in a statement.
The Directorate continued conducting pilot RBS examinations on selective basis to some banks and financial institutions.
In the year 2007 the Directorate plans to finalize RBS examination manual and improvement of off site surveillance ready for full implementation of Risk Based Supervision approach.
The Directorate carried out various supervisory and regulatory activities aimed at enhancing and strengthening the stability, soundness and safety of the banking system.
During 2006 the banking industry registered significant growth and developments while continuing to be stable.
During the year 2006, Tanzanian banks remained, on overall basis, adequately capitalized, with paid-up capital recording an increase of 15 per cent from year 2005.
The banking sector?s assets increased by 26 per cent with the ratio of earning assets to total assets remaining steady at 83 per cent as recorded in 2005.
Total funding of the banking sector recorded an increase of 26% with the funding structure being mainly composed of deposits which accounted for 83 per cent of total funding.
SOURCE: SUNDAY OBSERVER
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