Dar Es Salaam — A SENIOR banker yesterday credited the thriving local banking sector to positive monetary policies, regulatory framework and technological adoptions, saying Tanzania offered immense opportunities in the banking business.

"There are a lot of things about the banking industry in Tanzania that I can say are moving on the right direction," Barclays Tanzania Managing Director Kihara Maina said in Dar es Salaam, citing the fast advancement of banking technologies in the local market.

And, save for the snail pace at which justice is delivered on loan default related cases, Mr Maina said the government, security forces and commercial banks were working closely against financial crimes wreaking havoc in the banking sector not only in Tanzania but all over the world. "Barclays bank is in the forefront in the battle against financial crimes," he said, referring to heavy investments on technology and staff training that the bank has made.

Commenting on a recently announced move by the central bank to increase the minimum capital requirement for commercial banks from the current 5bn/- to 15bn/-, the MD described the plan as "a step in the direct direction" to promote strong and well capitalised banks in the market.

The central bank says the move that will see some small banks winding up business or seeking mergers with other banks envisages strengthening the banks' preparedness for financial crises. But, Mr Maina said the increased capital requirement will benefit the market even on the absence of crises.

"The higher the capital, the more serious investors will come in and invest in innovation and efficiency." Talking of his experience in the country's financial system, Mr Maina described Barclays Tanzania as a fast growing institution determined to lend to ordinary people, citing increased jobs, growth in customer deposits and increased loan portfolio as proofs of its impressive business growth.

"Our business is growing fast and we have been investing significantly to match that growth," he said, noting that the global Barclays Group owned bank has recently invested heavily in its network expansion.

Barclays, which has grown from a four to 32-branch bank, saw its customers' deposits swelling by nine per cent from 330bn/- to 360bn/- in a span of three months, according to its published financial statements for the second quarter of its operations, ending June 30, 2010.

The bank also increased its loan portfolio by almost six per cent to 233bn/- from 220bn/- during the previous quarter while cutting down investments in government securities to 48bn/- from the previous 67bn/-, because, said Mr Maina, "We believe that lending to people is generally a good path to take - those are the real producers from whom the government collects taxes."

However, he defended the bank's decreased credit --deposit ratio from the previous 67 to 64 per cent in June, saying, "It is a reflection that customers' deposits increased at a higher rate than we could lend out to borrowers."

But, the 690-employee bank suffered a cumulative loss of 7bn/- during the two quarters ending June 30, compelling shareholders to pump in more capital to cushion the losses. The bank's net capital increased from 50.5bn/- in March to 53.5bn/- last June. He however belittled the operational loss, saying the bank was generally performing impressively.

"Our income has been growing steadily quarter after quarter - ours is not growth for growth sake but growth with prudence, it is growth worth the risk." The bank has invested on its Automated Teller Machine (ATM) network, increasing the facilities from four to 54 countrywide.