IMF notes that while Tanzania is taking steps to align their legal framework with the FATF standards and improve the effectiveness of the AML/CFT framework, the progress has been however limited. PHOTO | SHUTTERSTOCK
Tanzanian financial sector has lost correspondent banking over weak anti-money laundering legislation, dealing a blow to Dodoma’s...
integration with the global payment system.The International Monetary Fund (IMF) disclosed through its Country report for Tanzania No 23/425 that the “loss of correspondent banking related to deficiencies in the anti-money laundering and combating the financing of terrorism (AML/CFT) framework remain key vulnerabilities.”
A correspondent bank is a financial institution that provides services to another one and usually in another country.
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It acts as an intermediary or agent by facilitating wire transfers, conducting business transactions, accepting deposits, and gathering documents on behalf of another bank.
However, the fund says the banking sector is well-capitalised, profitable and liquid, rapid credit growth, high credit concentration and financial dollarisation.
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