Reforms set DIB on path to full autonomy

DODOMA: THE Deposit Insurance Board (DIB) is undergoing major legal and structural reforms as it prepares to operate as a fully autonomous institution capable of strengthening the stability and resilience of Tanzania’s financial system.

Speaking in Dodoma on Tuesday while opening a training seminar for journalists, DIB Director, Mr Isack Kihwili said the reforms mark a significant turning point for the Board, which has operated under the Bank of Tanzania (BoT) since its establishment in 1994.

“For decades, DIB relied entirely on the Bank of Tanzania for offices, staffing and infrastructure. However, the government has now decided that this institution should stand independently,” he said.

A new structure approved in March last year has enabled the board to begin functioning largely on its own, and the relocation from BoT premises is in its final stages. Mr Kihwili emphasised that DIB’s core mandate, protecting depositors of all BoT-licensed institutions authorised to receive deposits, remains central to public trust in the banking sector.

“This protection ensures confidence. Even when a bank becomes insolvent or loses its licence, depositors are assured of recovering funds covered under the DIB scheme,” he said.

He praised journalists for their crucial role in informing the public during bank closures in recent years, noting that media coverage ensured strong turnout from depositors collecting insured funds.

Presenting an update on the liquidation process, DIB Manager for Surveillance and Resolution, Mr Chacha Wang’eng’i, said every bank or financial institution licensed by BoT is required by law to contribute to the Deposit Insurance Fund. He said that as of last Tuesday, the Fund had 44 member institutions.

To date, nine banks are under DIB liquidation including Delphis Bank Ltd and Greenland Bank (both in final stages of liquidation), while liquidation is ongoing for FBME Bank Ltd, Mbinga Community Bank Plc, Kagera Farmers’ Cooperative Bank, Meru Community Bank Ltd, Covenant Bank for Women Ltd, Efatha Bank Ltd, and Njombe Community Bank Ltd.

Mr Wang’eng’i said payout progress continues, noting that FBME depositors have so far been paid 85 per cent of their entitled amounts, Mbinga Community Bank 84.66 per cent, Efatha Bank 72.46 per cent, Covenant Bank for Women 83.73 per cent, Njombe Community Bank 87.26 per cent, Meru Community Bank 92.39 per cent and Kagera Farmers’ Cooperative Bank 94.06 per cent.

He said the liquidation process is challenged by outdated customer information, changes in contact details, relocation of clients, and deaths of account holders without clear legal heirs. Other challenges include court-related claims, legal disputes and limited public understanding of DIB’s responsibilities.

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Presenting the Board’s responsibilities, DIB Finance and Accounts Manager Mr Romuli Mtui said the institution compensates protected deposits up to 7.5m/- per account.

“As of 30 June 2025, the Fund had the capacity to fully compensate 99.26 per cent of all accounts in member institutions,” he said.

He added that annual contribution assessments are conducted at a rate of 0.15 per cent of the average deposits of each member bank or financial institution. “Once assessment is issued, institutions must remit the amount within 21 days. Failure to do so attracts penalties,” he said.

The one-day seminar aimed at equipping journalists with greater understanding of DIB’s mandate, particularly as the institution transitions to full autonomy, a shift expected to enhance its operational efficiency and public confidence.