The Banking and Financial Institutions (Compulsory Liquidation) Regulations, 2024
This section is titled “Citation, Application, Interpretation” and appears at the start of Part II on the liquidation process.
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- The Banking and Financial Institutions (Compulsory Liquidation) Regulations, 2024
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This section is titled “Citation, Application, Interpretation” and appears at the start of Part II on the liquidation process. This section lists topics covered in Part III, including the liquidator, liquidation plan, creditor claims, meetings, payments, and closure of liquidation. This section is a heading listing topics and identifying the regulations as made under section 71. This section says the Regulations may be cited as the Banking and Financial Institutions (Compulsory Liquidation) Regulations, 2024. These Regulations apply to a bank or financial institution that is under compulsory liquidation.
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Provisions of The Banking and Financial Institutions (Compulsory Liquidation) Regulations, 2024
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Section 3
AI-assisted research summary: This section is titled “Citation, Application, Interpretation” and appears at the start of Part II on the liquidation process.
3. Citation. Application. Interpretation. PART II LIQUIDATION PROCESS
Part
PART II LIQUIDATION PROCESS
- 12 Verify source ↗
Section 12
AI-assisted research summary: This section lists topics covered in Part III, including the liquidator, liquidation plan, creditor claims, meetings, payments, and closure of liquidation.
12. Appointment of liquidator. Powers of liquidator. Duties of liquidator. Liquidation plan. Proof of debts. Notification and closure of correspondent bank accounts. Creditors meetings. Payment to creditors and ranking of claims. Closure of liquidation. 1 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) PART III MISCELLANEOUS PROVISIONS
Part
PART III
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Section 15
AI-assisted research summary: This section is a heading listing topics and identifying the regulations as made under section 71.
15. Information sharing. Liquidation expenses. Liquidator’s accountability. THE BANKING AND FINANCIAL INSTITUTIONS ACT, _________ REGULATIONS _________ (Made under section 71) PART I PRELIMINARY PROVISIONS Citation - 13 Verify source ↗
The Bank and the liquidator shall put in place
AI-assisted research summary: The Bank and the liquidator must put in place an information-sharing arrangement during liquidation.
13. The Bank and the liquidator shall put in place information sharing arrangement during liquidation. - 14 Verify source ↗
(1) Liquidation expenses shall be covered by
AI-assisted research summary: Liquidation expenses must be paid from the estate of a bank or financial institution under liquidation. If liquidation proceeds do not cover the liquidator’s administrative expenses, the Bank must reimburse the shortfall to the liquidator.
14.- (1) Liquidation expenses shall be covered by the estate of a bank or financial institution under liquidation. (2) Where liquidation proceeds are insufficient to cover administrative expenses incurred by the liquidator, the Bank shall reimburse the deficit to the liquidator. Liquidato r’s accounta bility - 15 Verify source ↗
Where the Bank is satisfied that the liquidator
AI-assisted research summary: If the Bank is satisfied a liquidator has not done their statutory duties, the Bank may investigate and take any action it considers necessary.
15. Where the Bank is satisfied that the liquidator has not performed his statutory duties, the Bank may inquire into the matter and take any action as it may deem necessary. 9 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) ________ SCHEDULE ________ (Made under regulation 8(1)) PROOF OF DEBT Name of the Liquidator: …………………………………………………… Name of a bank or financial institution under liquidation: ………………… Effective date of liquidation: ……………………………………………….
Part
PART I
- 1 Verify source ↗
These Regulations may be cited as the Banking
AI-assisted research summary: This section says the Regulations may be cited as the Banking and Financial Institutions (Compulsory Liquidation) Regulations, 2024.
1. These Regulations may be cited as the Banking and Financial Institutions (Compulsory Liquidation) Regulations, 2024. Application - 2 Verify source ↗
These Regulations shall apply to a bank or
AI-assisted research summary: These Regulations apply to a bank or financial institution that is under compulsory liquidation.
2. These Regulations shall apply to a bank or financial institution under compulsory liquidation. Interpretation - 3 Verify source ↗
In these Regulations, unless the context otherwise
AI-assisted research summary: This section defines key terms used in the Regulations.
3. In these Regulations, unless the context otherwise Cap. 342 Cap. 197 requires- “Act” means the Banking and Financial Institutions Act, “Bank” has the meaning ascribed to it under the Bank of Tanzania Act; “bank” has the meaning ascribed to it under the Act; “creditor” means a person who has receivables from or claims to the bank or financial institution under liquidation, including depositors; “financial institution” has the meaning ascribed to it under the Act; “liquidator” means a person appointed by the Bank to wind up the affairs of a bank or financial institution; “person” has the meaning ascribed to it under the Act; 2 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) “statement of affairs” means audited statement of financial position of a bank or financial institution which contains assets, liabilities and capital on the date of license revocation which is prepared in accordance with the prevailing financial accounting standards. PART II LIQUIDATION PROCESS Appointment of liquidator
Part
PART II
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(1) Where a resolution plan calls for liquidation
AI-assisted research summary: If the Bank determines a resolution plan requires liquidation, it must appoint a liquidator and publish a notice of the appointment.
4.-(1) Where a resolution plan calls for liquidation of a bank or financial institution as determined by the Bank, the Bank shall appoint a liquidator. (2) The appointment of the liquidator under subregulation (1) shall have the same effect as the appointment of any other liquidator done by the Court. the in writing, such appointment and (3) The Bank shall, of liquidator inform appointed responsibilities. (4) The Bank shall cause General Notice of appointment of a liquidator to be published in the Gazette and in at least one newspaper of wide circulation in the United Republic. Powers of liquidator - 5 Verify source ↗
The liquidator shall have powers to
AI-assisted research summary: The liquidator has power to carry out a wide range of actions needed to wind up a bank or financial institution under liquidation.
5. The liquidator shall have powers to- (a) institute or defend any action or other legal proceedings in the name and on behalf of a bank or financial institution under liquidation; (b) appoint professionals or any other person to assist in performance of the duties or provision of services as may be required; (c) appoint an agent to assist the liquidator in any business as it may be necessary; (d) realize assets of a bank or financial institution under liquidation and pay creditors; (e) to negotiate, compromise, and settle any claim, debt, liability, or obligation of a bank or financial institution under liquidation; (f) sell the property of a bank or financial institution under liquidation by public auction or private transfer of ownership contract and effect 3 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) accordingly; (g) review the existing contracts of a bank or liquidation and institution under financial determine its continuity; (h) raise on derivatives of a bank or financial institution under liquidation any amount of money requisite; (i) set off mutual credits, debts or mutual dealings of a bank or financial institution under liquidation which existed prior to its liquidation; (j) invest funds in the liquidation account which are not immediately required for the purpose of financing day to day liquidation operations in the Government securities; (k) execute all deeds, receipts and other documents for the purpose of facilitating liquidation; and (l) perform any other action as may be necessary for liquidation of a bank or financial institution. Duties of liquidator - 6 Verify source ↗
The
AI-assisted research summary: The liquidator must carry out listed duties after appointment, including taking control of the bank’s property and affairs, giving notices, and filing returns.
6. The liquidator shall, from the date of appointment, have the following duties: Cap. 212 (a) take into custody or keep under control all the properties and affairs of a bank or financial institution under liquidation; (b) file a notice of his appointment in a format prescribed under the Companies Act to the Registrar of Companies within fourteen days; (c) within thirty days, publish in at least two newspapers of wide circulation in the United Republic, a notice to- (i) inform creditors and debtors of his appointment; (ii) require creditors to submit claims within thirty days from the date of the notice; (iii) require debtors to repay their debts and surrender any property of a bank or financial institution under liquidation in their possession within thirty days from 4 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) the date of the notice; and (iv) require customers who have valuables in the safe custody of a bank or financial institution to confirm and collect their valuables; (d) prepare a list of all assets of a bank or financial institution under liquidation; (e) prepare a statement of affairs of a bank or financial institution under liquidation which shall be subject to external audit; (f) prepare a register of creditors of a bank or financial institution under liquidation showing their personal particulars, nature and extent of liability; Cap. 212 Liquidation plan (g) file semi-annual returns on liquidator’s statement of receipts and payments with the Registrar of Companies in the form prescribed under the Companies Act; and (h) discharge any other duties as may be required for liquidation of a bank or financial institution. - 7 Verify source ↗
(1) The liquidator shall, within thirty days from
AI-assisted research summary: The liquidator must prepare a liquidation plan within 30 days of appointment.
7.-(1) The liquidator shall, within thirty days from the date of appointment, prepare a liquidation plan for liquidation of a bank or financial institution. referred to under subregulation (1) shall contain the following particulars: (a) detailed background information of a bank or liquidation plan (2) The financial institution under liquidation; (b) detailed description of the assets and liabilities; (c) projected income and expenditure; (d) detailed description as to the classification of claims and priority order of payment; (e) details of assets, projected sale of assets and projected loan recoveries for the next ninety days from the date of the plan; (f) details of liabilities and projected payment to depositors and creditors in the next ninety days from the date of commencement of the plan; (g) liquidation costs and expenses; (h) list of existing contracts to be continued or terminated; 5 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) Proof of debts (i) details of existing and potential litigations and related costs; and (j) any other information as the liquidator may deem necessary. (3) The liquidation plan referred to under subregulation (1) shall be reviewed on quarterly basis. - 8 Verify source ↗
(1) The claims referred to under regulation
AI-assisted research summary: This section sets the form for certain claims, lets the liquidator extend time and ask for evidence, and requires written notice of a rejection; a dissatisfied creditor may apply to court.
8.-(1) The claims referred to under regulation 6(c)(ii) shall be in the form set out in the Schedule. (2) The liquidator may extend the period prescribed under regulation 6(c)(ii), where he is satisfied that a creditor has good reasons for not being able to submit his claim within the prescribed time, provided that the extension period shall not exceed thirty days. (3) The liquidator may request any document or other evidence to be produced by the creditor where necessary for the purposes of substantiating the whole or part of the claim. (4) A claim may be admitted for payment of liquidation proceeds or rejected for the whole or part of the amount claimed by the creditor. (5) Where the liquidator rejects a claim in whole or in part, he shall within seven days from the date of submission of the claim, communicate his decision to the creditor in writing stating the reasons thereof. (6) Where a creditor is dissatisfied with the liquidator’s decision under subregulation (4), he may within twenty-one days of receiving the decision, apply to the Court of competent jurisdiction for necessary orders. (7) Creditors or an authorised representative shall be allowed to inspect the credit register and may, upon inspection, the information contained therein. to amend liquidator request the Notification and closure of correspondent bank accounts
Part
part of the claim.
- 9 Verify source ↗
(1) The liquidator shall notify correspondent
AI-assisted research summary: The liquidator must notify correspondent banks and card/wire transfer organisations that correspondent account operations need his written approval, and must instruct banks to move available balances to the liquidation account at the Bank.
9.-(1) The liquidator shall notify correspondent banks and organisations which provide cards and wire transfer settlements that, any operations of correspondent accounts shall not be carried out without his written approval. (2) The liquidator shall instruct correspondent banks to transfer available balances maintained in a bank or 6 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) Creditors meetings financial institution’s correspondent accounts to the liquidation account at the Bank. - 10 Verify source ↗
(1) The liquidator may at any time, convene a
AI-assisted research summary: The liquidator may convene a creditors’ meeting at any time. If that meeting is convened, the creditors must appoint at least five representatives to form the Creditors Committee, and those representatives must contact and assist the liquidator when necessary.
10.-(1) The liquidator may at any time, convene a meeting of creditors in a manner that is deemed appropriate to discuss the progress of liquidation. (2) Where a meeting under subregulation (1) has been convened, the creditors shall appoint at least five representatives among the creditors to form the Creditors Committee who shall contact and assist the liquidator where necessary. Payment to creditors and ranking of claims - 11 Verify source ↗
(1) The liquidator shall utilise the amounts
AI-assisted research summary: The liquidator must use money from liquidation to pay unsecured claims in the stated priority order, and claims at the same priority must be paid equally.
11.-(1) The liquidator shall utilise the amounts realised under liquidation to pay claims, other than secured claims, to the extent of any security, in the following order: Closure of liquidation (a) administrative expenses; (b) any deposit liability of a bank or financial institution under liquidation in excess of the protected deposits paid by the Fund; (c) any general or senior liability of a bank or financial institution under liquidation; (d) any obligation subordinated to depositors or general creditors; and (e) any obligation to shareholders. (2) Claims with the same priority shall rank equally and abate in equal proportions. - 12 Verify source ↗
(1) The liquidation process shall be deemed to
AI-assisted research summary: After liquidation is completed, the liquidator must file a report and audited statement with the Bank within 30 days, surrender any unclaimed valuables, and notify the Registrar of Companies after getting a release certificate.
12.-(1) The liquidation process shall be deemed to be complete where- (a) payment is made against all claims of a bank or financial institution under liquidation; or (b) a bank or financial institution under liquidation has pending claims but has no assets to settle pending claims. (2) Subject to subregulation (1)(b), a bank or financial institution under liquidation shall be considered to have no assets where- (a) all assets have been sold; (b) the market value of unsold assets is zero; and (c) loans and other assets cannot be recovered. 7 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) (3) Upon completion of the liquidation, the liquidator shall- (a) prepare a liquidation report which includes: (i) information regarding all assets realised by the liquidator since commencement of the liquidation; (ii) information regarding payment against claims of depositors and other creditors; (iii) valuer’s opinion on the liquidator’s conclusion that the market price of unrealised assets is zero; (iv) details on outcome of recovery measures, if any; and (v) information unclaimed regarding valuables under a bank or financial institution’s safe custody. (b) surrender to the Bank unclaimed valuables under a bank or financial institution’s safe custody, if any; (c) prepare an audited statement of income and expenses, sources and uses of funds in respect of a bank or financial institution under liquidation; under subregulation 3(c) in English and Kiswahili in at least two newspapers of wide circulation in the United Republic. information (d) publish referred to (4) The liquidator shall submit to the Bank a liquidation report and audited statement of income and expenses, sources and uses of funds during the period of liquidation within thirty days upon completion of the liquidation process. (5) Where the Bank is satisfied that the liquidation report and audited statement presents a correct state of affairs of the liquidation, the Bank shall release the liquidator and issue a certificate of release. (6) Where the Bank is dissatisfied with the information submitted under subregulation (5), it shall withhold the certificate of release and request the liquidator to submit additional information or take any other as it may deem necessary. (7) The liquidator shall, upon obtaining a certificate 8 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) issued under subregulation (5), inform the Registrar of Companies who shall immediately strike off the name of the company from the Register of Companies. PART III MISCELLANEOUS PROVISIONS Information sharing Liquidation expenses
Part
SCHEDULE
- 4 Verify source ↗
Section 4
AI-assisted research summary: A creditor’s claim should include the creditor’s name, address, total amount including interest as at liquidation, and documents supporting the debt; the liquidator may ask for further proof.
4. Name of the Creditor. Address of the Creditor. Total amount of claim, including interest, as at the date a bank or financial institution was placed under liquidation. Details of any documents by reference to which the debt can be substantiated (Please attach all necessary documents). NB: The liquidator may request for any document or evidence to substantiate the claim. - 5 Verify source ↗
Section 5
AI-assisted research summary: If the total amount includes interest, the amount of interest claimed should be stated.
5. If total amount above includes interest, please state amount of interest claimed. - 6 Verify source ↗
Section 6
AI-assisted research summary: If the total amount includes tax, the amount of tax and the net claim amount must be shown.
6. If the total amount shown above includes tax, please show: (a) the amount of tax; and (b) the amount of claim net of tax. - 8 Verify source ↗
Section 8
AI-assisted research summary: A creditor must state how and when the debt was incurred, and if there is security held by a bank or financial institution under liquidation, also give details of that security. An authorised representative must attach evidence of authorisation.
8. State the particulars of how and when the debt was incurred. Where there is any security held by a bank or financial institution under liquidation, state the particulars thereof including: (a) type of the security held; (b) the value of the security; and (c) the date when the security was pledged. Signature : ……………………………………… Creditor or an authorised person to act on his behalf. Note: In case of an authorised representative, please attach evidence of authorisation. Name of the creditor or an authorised person: .…………………………………………. 10 Banking and Financial Institutions (Compulsory Liquidation) GN. NO. 98 (Contd.) FOR OFFICIAL USE ONLY Received from: Amount claimed: Date: Name of the Liquidator: Dodoma, 5th February, 2024 EMMANUEL M. TUTUBA, Governor 11
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