Paper
The Credit Concentration and Other Exposure Limits Regulation, 2001
Risk diversification strategies for the banking sector in Tanzania defined
Download
21 pages
This document discusses the regulation that gives prescription to the banks and financial institutions on investment related matters for fixed assets in Tanzania.
The objectives of the policy are to:
- Regulate the amount of depositor's money that could be used for investing in fixed assets;
- Ensure that risk exposure of any bank or financial institution to customers, industry, economic sector, or activity gets diversified. This is to ensure and enhance the stability of the financial system;
- Ascertain that credit gets available to a large number of borrowers instead of just few.
The document outlines the:
- Types of risk exposures any financial institutions could find itself in;
- Procedures for identifying risk exposures and the necessary documentation an institution should maintain for identifying risk factors;
- Rules on concentration of credit to different stakeholders of the bank;
- Rules on equity investments;
- Limits on underwriting commitments;
- Penalties and sanctions that are likely to be invoked in case of violation of this regulation.
About this Publication
Published
