THE deposits for banking institutions rose by 6.6 per cent to 20.07tri/- at the end of March, compared with 18.83tri/-recorded in the corresponding period last year, contributed largely by the increased number of agent banking services.
According to the Bank of Tanzania (BoT) Consolidated Zonal Economic Performance Report, it shows that the deposits improved in all zones, largely driven by increase in agent banking services.
The Dar es Salaam zone contributed 61.0 per cent of the total deposits that rose to 12.23tri/- in the quarter under review compared to 11.25tri/- registered in the corresponding period last year.
The total deposits in the northern zone during the period under review was 3.23tri/-, which is 16.0 per cent change compared to 3.24tri/- in the corresponding period last year.
In the Lake Zones, the total number of deposits rose by 7.9 per cent to 1.58tri/- compared to 1.41tri/- in the corresponding period last year.
The credit extended by banks to various economic activities increased by 4.2 per cent to 15.93tri/- compared with 15.29tri/-disbursed in the quarter ending March last year.
All zones recorded expansion in credit, save for the southern highlands and northern zones. Out of the total outstanding credit, 64.4 per cent of the total credit was directed to personal, trade and agricultural activities.
According to the Monetary Policy Statement for June, the banking sector was generally sound and stable, with capital and liquidity levels above the regulatory requirements.
The ratio of core capital to total risk weighted assets and off-balance sheet exposure was 17.4 per cent at the end of April this year, above the minimum regulatory requirement of 10.0 per cent, while the ratio of liquid assets to demand liabilities was 32.7 per cent, compared with the minimum regulatory requirement of 20.0 per cent.
The quality of assets of banks deteriorated as reflected by the ratio of non-performing loans to gross loans that rose to 11.0 per cent in April this year from 10.7 per cent in June last year.
The intensified monetary and fiscal policy measures implemented to cushion the economy from the impact of Covid-19, including granting flexibility on regulatory requirement for loan restructuring, will help to reduce the risk of further deterioration of quality of loan portfolio of banks due to slow down of some businesses such as tourism.
The Bank will continue to enforce risk based prudential requirements, credit underwriting standards, and use credit information system in order to reduce non-performing loans close to the desired level of not more than 5 per cent.
Other measures include implementation of consumer protection framework and ensuring that banks’ staff adhere to the Tanzania Banker’s Association Code of Conduct.