BoT asks banks to prepare for El Nino

DAR ES SALAAM: BANK of Tanzania (BoT) has advised financial institutions in the country to prepare to mitigate the effect of the looming El Nino this month.

The central bank call was followed by the announcement of the Tanzania Meteorological Authority (TMA) issued in May.

According to TMA the forecasting short-term rains (vuli rains) that are expected to start from this month to December are more likely to be influenced by El Nino condition that includes heavy rains in most parts of the country.

BoT Deputy Governor Sauda Msemo said in a statement issued on Tuesday that the heavy rains expected to cause impacts to sensitive sectors including financial institutions should take measures that could help them to minimise disruption to the provision of financial services.

“The minimum measures include to ensure maintaining adequate cash in vaults and insurance cover for extra cash for days that main vault might be inaccessible and to encourage customers to switch to electronic payments and ensure maintaining adequate float to facilitate online payments,” Ms Msemo said.

The Deputy Governor also advised banks to increase transaction limits to customers, assess the readiness of businesses and information technology recovery arrangements and ensure the instant payments system accounts are effectively funded.

In a media workshop in August, the TMA Acting Director General, Dr Ladislaus Chang’a, said that it was important for the citizens and other users of weather information to get the right information at the right time to get prepared before the season starts.

“When weather information reaches the members of the public timely and rightly will help them address challenges of the climate change, recognising the importance of weather forecast, the government has continued to build the capacity of the authority to implements its duties effectively,” Dr Chang’a added.

He said, not only the public will benefit from the information but it will also help responsible authorities to set plans for disaster management, food production and health for people’s wellbeing.

As of May, 47 licensed banks are operating in the country where 34 are commercial banks, four community banks, four microfinance banks, two development banks, and one each non-bank financial institution, house financing company, and 1 mortgage refinancing company.

The banks operate some 1000 branches in the country.