News Column

Tanzanians Urged to Step Up the Culture of Saving

July 7, 2014

Daily News Reporter

TANZANIANS have been urged to build and strengthen a culture of saving through banks and other financial institutions for their own benefits and the country's economic development.

Talking to journalists in Dar es Salaam, the Deposit Insurance Board (DIB) officials said the culture of saving through banks enables depositors access loans for their development.

The DIB Manager, Finance and Administration, Mr Richard Malisa, said people should understand that the bank's deposits enables the financial institutions to grant loans (working capital) to individuals and institutions for running projects and businesses.

"Banks are considered to be engines of the economy through their main role of performing financial intermediation through which they supply capital to various businesses in the economy.

"We call upon people to put their money in banks since the practice benefits both individuals and the country at large," he said.

He said the public should be confident because their money is safe in banks and that DIB was established for the purpose of protecting their deposits, in the event a licensed bank or financial institution goes under.

The DIB Operations Manager, Ms Rosemary Tenga, said the board which operates within the Bank of Tanzania (BoT), seeks to provide protection to small and unsophisticated depositors against risks of losing their deposits arising from bank failures and thereby maintaining public confidence in the banking and financial system.

The objectives of the board include providing insurance against loss of part or all deposits in a member institution and to contribute to the stability of the financial system in Tanzania. She said DIB is mandated to promptly pay off depositors of failed banks or financial institutions up to the maximum coverage rate stipulated by the law which currently stand at 1.5m/-.

Ms Tenga said that the board also conducts liquidation of failed banks or financial institutions once appointed by the BoT.

"Proceeds of liquidation are paid to creditors and therefore if there is a good collection, depositors, who are part of bank creditors, receive more in case they had balances in the bank that is above the maximum deposit insurance coverage level," she said.

She called upon students to start creating the culture of saving and particularly with licensed banks and financial institutions for safety and other associated benefits.

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Source: AllAfrica

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