Dar es Salaam — At least 95 bureau de change operators in Tanzania have closed shop in the last six months after failing to meet new operating licensing requirements.
In June last year, the central Bank of Tanzania (BoT) reviewed the capital and modus operandi for all bureau de change operators in the country - and gave them till December 31, 2017 to reapply for business licences under the new arrangements.
The BoT raised the minimum capital threshold for bureau de change operators from Sh100 million to Sh300 million for Class-A licence, and from Sh250 million to Sh1 billion for a Class-B licence. It also increased the non-interest bearing deposit from $50,000 to $100,000.
The new operational conditions also require that no person is allowed to have interest in more than one bureau - and that, at least two-thirds of the required capital should be in the form of cash.
In addition, bureaux operators are obliged to demonstrate the authenticity of the source of the funds that are to be invested in the bureaux.
Finally, bureau de change outlets are now also required to be fitted with CCTV cameras.
"Out of the 297 bureau de change outlets that were eligible to apply for relicensing when the exercise started, 233 submitted applications requesting relicensing or closing operations. The remaining 64 did not submit any request by the set deadline," the BoT director for banking supervision, Mr Kened Nyoni, told The Citizen over the weekend.
Mr Nyoni also revealed that 31 out of the 233 bureaux de change operators who submitted applications opted for closure of business - thus making a total of 95 operators closing shop.
In the event, the central bank officially revoked the licences of the 95 entities on January 2, 2018.
"So far, 64 individual bureaux have obtained approval and the remaining 138 applications are undergoing processing - largely because their applications were received close to the deadline," Mr Nyoni explained.
The 64 operators who have already been relicensed consist of 42 head offices and 26 branches, thereby making a total of 68 outlets countrywide, he noted.
However, there are some operators among the 138 who have not yet submitted the requisite documents to facilitate the review process.
In that regard, BoT has given them till January 31 this year to ensure that they submit all the required documents to enable completion of relicensing process.
"During this (grace) period, the bureaux are allowed to continue with their operations," Mr Nyoni told The Citizen in an e-mail response to follow-up questions.
The decision to review the licensing conditions for bureaux de change operators was taken as part of efforts to ensure that the bureaux are not used as a conduit for financing illicit drug trafficking and money laundering.