Tanzania’s central bank has removed the chief executive of the state-run TIB Corporate Bank with immediate effect, citing poor performance of the financial institution.
Tanzanian lenders are facing increased supervision after a surge in non-performing loans eroded capital and dampened profits.
“The Bank of Tanzania has decided to suspend the appointment of Frank Nyabundege as managing director of TIB Corporate Bank … following unsatisfactory performance of the bank,” the central bank said in a statement late on Saturday.
“This measure has been taken to improve the oversight and performance of banks owned by the government.”
Nyabundege was not immediately available for comment.
The central bank said it has appointed one of its officials to oversee the affairs and daily business operations of TIB Corporate Bank in acting capacity as managing director.
“Bank of Tanzania would like to inform the public that TIB Corporate will continue to provide all banking services, including payment of matured obligations,” it said.
Tanzania’s central bank has revoked the licenses of at least nine banks since 2017 and has shut down dozens of foreign exchange bureaus, saying the move was aimed at safeguarding the stability of the financial services sector.
This comes after President John Magufuli ordered the regulator to take tough action against failing financial institutions.
In December, the International Monetary Fund said nearly half of Tanzania’s 45 banks were vulnerable to adverse shocks and risked insolvency in the event of a global financial crisis.