Tanzanian’s Urged to Cultivate Banking Culture

Tanzanians have been urged to cultivate and strengthen a culture of keeping money in bank accounts for their safety and country’s economic development.

Talking to journalists in Dar es Salaam over the weekend, a legal officer at the Deposit Insurance Board, Mr Rashid Mrutu, said the culture of having and keeping money in banks builds a rapport between depositors and the financial institutions, something he said creates opportunities for depositors to get loans for development.

Mr Mrutu said that people should understand that bank deposits enable the financial institutions to give loans to individuals and institutions for running projects and businesses, hence country’s progress.

“We call upon people to put their money in banks because individual and country benefits are huge,” he said during a Financial and Investment Services Week event. DIB participated in the event to inform and educate the public on services they offer.

He said the public should be confident because their money is safe in banks and that DIB was created for the sole purpose of protecting their deposits, should anything go wrong in banks.

Explaining more on the role of the board, the official said the board which operates under the Bank of Tanzania seeks to provide protection to small depositors or small savers against risks of losing their savings arising from bank failures and thereby maintaining public confidence in the banking and financial system.

The objectives of the board include providing insurance against loss of part or all deposits in a member institution and to contribute to the stability of the financial system in Tanzania.

Explaining further on the functions of the board, he said DIB is mandated to promptly pay off depositors of failed banks or financial institutions up to the maximum coverage rate which currently stands at 1,500,000/-.

Mr Mrutu said that the board also conducts liquidation of failed banks or financial institutions once appointed by the BoT. “Proceeds of liquidation are paid to creditors and therefore if there is a good collection, depositors, who are part of bank creditors, receive more in case they had balances in the bank that is above the maximum deposit insurance coverage level,” he said.

Originally published on DailyNews