Bank of Tanzania gives ‘all-clear’ to fourth bureau de change

The Bank of Tanzania (BoT) has awarded a licence to a fourth bureau de change since closure of most of them in 2018. Fast Forex Bureau joins three others which are currently operating. In September, the central bank said it received five applications which are being scrutinised and the owners will be given operating licences if they meet all the criteria to operate a bureau de change in the country.

Reports show that the BoT had closed down almost all bureaus that were operating in the country by 2018. Subsequently, the central bank conducted a physical supervisory compliance review of the bureaux de change in Tanzania. The review resulted in closure of all bureau de change in the country to pave the way for compliance review and re-licensing.

Several reasons were mentioned for the closure of the bureaux de change. Some bureau de change outlets were said to be sources of money laundering, tax evasion and poor Know Your Customer (KYC) compliance regulations on Foreign Exchange, namely; the Foreign Exchange (Bureau de Change) Regulations, 2019 (GN No. 450 of 2019) published on June 7, 2019.

These regulations revoke the earlier regulations issued in 2015 namely the Foreign Exchange (Bureaux de Change) Regulations, 2015 (GN No. 245 of 2015).

However, the BoT manager responsible for supervision of microfinance institutions, Mr Victor Tarimo, told The Citizen that three bureaux that were not closed have been doing business and opening new branches in different parts of the country. He noted that one that recently met all the criteria was recently awarded an operating licence making a total of four bureaux.

“We have been receiving phone calls from various bureaus that were shut down, seeking for clarification on the new requirements needed to get licence for operating a bureau, ‘’ he said.

Noting that all bureau owners that will send new applications for the business, will be awarded licence if they meet all the criteria that have been set.

According to new requirements of operating a bureau de change, any application for a business licence must be accompanied with a written declaration and assurance of availability of not less than Sh1 billion set aside as capital.

Any addition of Capital must have Central Bank approval.

A Bureau de change may increase or add its branch network in Tanzania but only upon obtaining a license from the Central Bank.

Regulation 16 requires the Central Bank to issue a branch opening license on a special circumstance such as the needs of a particular location. Among others, a feasibility study substantiating the demand gap must be submitted to the Central Bank for that purpose. It is important to note that, Bureau de change cannot relocate to another area without prior approval of the Central Bank and payment of Sh1 million as relocation fee (regulation 21).