Tanzania's central bank has placed a 10-year limit on the tenure of chief executives officers of banks and banned elected officials from serving on the boards of financial institutions.
CEOs and board members of banks will need to stand down for three years after completing a decade in office before they can be reappointed, the Bank of Tanzania said. The aim of the new rules, published last week, is to “promote and maintain public confidence in banks and financial institutions” by improving corporate governance.
Banks will also be prohibited from offering commercial loans to employees on terms more favorable than those available to other regular borrowers.
Tanzania has tightened regulatory oversight of banks in recent years in an attempt to safeguard stability of its financial services sector. The central bank is encouraging consolidation of banks and wants to lower bad loans to boost the growth of credit to the private sector.
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