2024 BOT Guidelines on Fees and Charges for Banks and Microfinance Institutions

The Bank of Tanzania (BOT) has recently issued guidelines on fees and charges:

• BOT Guidelines on Fees and Charges for Banks and Financial Institutions 2024.
• BOT Guidelines on Fees and Charges for Microfinance Services Providers 2024.
• BOT Guidelines on Fees and Charges for Non-Bank Payment Systems Providers 2024.

Please see below an outline summary of some of the material items in the guidelines for Banks and Financial Institutions (BFI) and Tier 2 Microfinance Service Providers (MSP):

1. MSPs and BFIs must establish adequate governance arrangements.
2. Responsibilities on boards of directors, “senior management” and “those charged with governance” to:
   • periodically review the strategy and policy for imposition of fees and charges;
   • ensure the fees and charges on financial products and services are fair and equitable; and
   • develop and implement strategy and policy frameworks for imposition of fees and charges on financial products and services, etc.
   • “Senior management”  means officers charged with oversight of daily operational activities of MSPs
   • “Those charged with governance” (TCWG) means persons with responsibility for overseeing the strategic direction of the MSP and obligations related to the accountability of the MSPs.
3. Adequate and appropriate internal controls and policies on imposition of fees and charges must be put in place by all BFIs and MSPs.
4. Taking into account services and benefits offered, customer segment, etc. BFIs and MSPs shall provide reasonable and affordable fees including:
   • Lending fees i.e. management fees, commitment fees, facility enhancement fee and loan restructuring fees.
   • Electronic transactions fees.
5. BFIs and MSPs shall not charge insurance premium above actual premium charged by the insurer and shall not charge insurance if the loan is not insured by a licensed insurer.
6. Early settlement or cancellation fees and penalties for late payment  may only be charged if provided in the loan agreement.
7. In order to on-board low-income earners into the banking sector, BFIs shall offer a special individual universal saving account which does not attract a monthly maintenance fee, is maintained in TZS and is owned by an individual.
8. BFIs and their merchants shall not impose fees and charges on merchant payments by cards.
9. MSPs shall not impose fees and charges that are part and parcel of own operating processes and or risk management practices to financial consumers.
10. Certain fees are prohibited, such as card cancellation fees.
11. MSPs must annually publish, in both Kiswahili and English, interest rates, fees and charges in conspicuous places in their premises and on any media with high coverage in Tanzania.
12. BOT may impose a penalty / fine of up to TZS 20 million to BFIs and MSPs, and their directors, officers or employees, for non-compliance.

NOTE: This has been prepared for general information purposes for any interested persons, it is not comprehensive information on the subject matter and it should not be regarded as legal advice.

Please contact us if you have any comments or questions.