Paper
The Liquid Asset Ratio Regulations, 2000
Directive issued by the Bank of Tanzania under the Banking and Finincial Institutions Act, 1991
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This document is the regulation issued by Bank of Tanzania pertaining to Liquid Asset Ratio Management (LARM), to be applicable to all banks and financial institutions in the region.The document is divided into chapters and provides information on the following:
- General provisions and the glossary of technical terms used in the regulation;
- Instructions to all banks regarding developing and implementing effective techniques and procedures to monitor, measure and control the institutions' liquidity requirements and the LARM status;
- The procedures to adopt, and the factors to keep in mind, while measuring the cash flows of the banks;
- Internal inspection and auditing the banks need to subject themselves to ensure that liquidity and funding policies and procedures are being adhered to;
- The minimum liquid assets the banks can maintain based on their respective demand liabilities;
- Submission schedules on the LAMR status and the maximum gross loan portfolio a bank can have;
- The kind of punishments and sanctions that are likely to be invoked in case of non-compliance to the statutes of the regulation.
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