Tanzania’s Stanbic bank faces additional $1.3m fraud fine

Stanbic Tanzania HQ in Dar es Salaam, Tanzania

Stanbic Tanzania HQ in Dar es Salaam, Tanzania

The Central Bank in Tanzania has threatened to impose a $1.38m penalty (Aprrox. Sh3bn) against the Chinese ICBC Standard Bank-Tanzania unit; Stanbic Bank for allegedly violating rules designed to prevent money laundering and other related fraud.

Finance and Planning Minister Dr Philip Mpango told reporters in Dar es Salaam Sunday, Bank of Tanzania (BoT) will fine Stanbic in line with the Banking and Financial Institutions Act of 2006.

UK’s Serious Fraud Office (SFO) had approved the first application of the Deferred Prosecution Agreement early last month for failing to prevent bribery. The bank was fined a record $32.2 m including a $6m penalty to be paid to the Tanzanian government but the bank now faces new charges and fines.

The minister said the local financial institution had violated the law and should be held accountable.

“The law requires the bank to offer its defense within a period not more than 20 days which we understand ends January 30, 2016. If by any means the central bank will not be satisfied with arguments raised, Stanbic will be subjected to paying the said penalty,” the Finance Minister stated.

Dr. Mpango said the decision made by the central bank is a reminder to Stanbic and other financial institutions plotting to violate the rules and regulations adopted to regulate the banking industry to be aware of the consequences.

BoT Deputy Governor Lila Mkola told reporters the government is still investigating the bank, individuals and other agencies which were involved in the controversial $6m bribe scandal.

Mkola revealed authorities working on the probe include Tanzania Revenue Authority (TRA) and the Prevention and Combating of Corruption Bureau (PCCB).

Stanbic bankTanzania spokesperson Annette Mkini could not offer comment when contacted