Financial Services in Tanzania: New Process for Handling Consumer Complaints

The regulation of financial services in Tanzania is largely carried out by the Central Bank of Tanzania (the Bank).

Consumer protection regulations

On November 22, 2019, the Bank released the Consumer Protection Regulation (the Regulations) to build confidence in the sector among financial services customers and promote stability, growth and innovation. The regulations introduce high standards for efficient customer service delivery and market discipline, and ensure that consumers are treated fairly by regulated bodies. It is basically the basis for creating a robust consumer protection regime in the financial sector, thereby improving financial inclusion and ultimately creating a stable financial system.

The provisions apply to all financial service providers (both in mainland Tanzania and in Tanzania Zanzibar), including mobile operators that have been licensed by the bank, unless the bank stipulates otherwise in other provisions. In essence, the regulations aim to strike a balance in this sector between financial service providers and their authorized representatives (FSPs) and consumers of financial services in order to ensure a fair, inclusive and equitable exchange of products and services. They also aim to improve public financial awareness (particularly in relation to budgeting, financial planning, savings, investments, borrowing, retirement planning and self-protection against fraud), to improve the disclosure and transparency of the products and services offered, the confidentiality of consumer goods and Improve data. Security and Integrity, increasing competition in the sector by supporting innovation and interoperability, and enabling consumers to switch products and services.

As a result, the FSP must develop internal governance structures such as internal auditing and compliance as well as guidelines and procedures that ensure effective implementation of the regulations. In addition, the ordinances provide for the following responsibilities for the Board of Directors and the management of the FSP:

  • The FSP’s Board of Directors is responsible for approving the guidelines and overseeing their implementation. and
  • Senior management must have an appropriate process in place to oversee the FSP in all aspects of its operations and to ensure compliance.

In addition, the regulations require that these guidelines be submitted and reviewed annually by the bank no later than 30 days after approval by the Board of Directors.

General principles for consumer financial protection

The regulations contain the general G-20 high-level principles for the protection of financial consumers, which were developed in 2011 by a special task force of the Organization for Economic Co-operation and Development (OECD). 1 The principles include:

  • fair and fair treatment of consumers;
  • financial education and awareness;
  • Disclosure and transparency;
  • Conduct / work ethic or responsible business conduct;
  • Protecting consumer assets and information;
  • Competition; and
  • Handling and redressing complaints.

Complaint Handling Process

Institution of complaint to the FSP

Part IX of the regulation regulates the complaint handling process and the legal protection mechanism. FSPs must:

  • Establish clear channels for receiving, processing and investigating consumer complaints through channels such as phone lines, help desks, dedicated email addresses and web chats that are free, fair, accessible, timely, transparent and independent;
  • Developing a fair legal protection mechanism and a remuneration policy and process (in accordance with the guidelines issued by the Bank) for qualified consumers for compensation in the event of incorrect charges, additional costs or financial losses suffered by consumers as a result of negligence or fraudulent activity; and
  • Avoid conflicts of interest when dealing with consumer complaints.

In order to ensure a timely detection of complaints, the regulations prescribe deadlines that vary between 6 hours and 14 days depending on the category of products or services offered by the FSP. However, if the FSP is unable to deal with the complaint within the deadline set in the Regulations, the FSP may request an extension by notifying the bank of such failure before the statutory deadline has expired

Authorization to file a complaint with the bank

If complaints from FSPs are not resolved to the consumer’s satisfaction, the regulations provide that the bank will appeal if the complaint escalates within 14 days of receiving notification of the complainant about the resolution by the FSP. Before the bank can intervene, however, it must be ensured that the FSP provider has dealt with the complaint to its conclusion and that the complainant has suffered financial loss or significant inconvenience.

The rules also provide that a written complaint can be submitted directly to the bank if the complainant has not received a response from the FSP (depending on the time limit, which varies depending on the type of product that is the subject of the complaint).

Initiation of a complaint to the bank

A complaint filed with the bank must be in a form prescribed in the third timetable of the regulation. However, the bank has yet to issue guidelines or a circular regulating the receipt, processing and detection of consumer complaints submitted to the bank.

In addition, the bank can initiate independently and deal with consumer protection issues without being initiated by a party.

Detection of complaints by the Bank of Tanzania

In order to ensure that disputes are settled quickly, the law prescribes deadlines within which a matter must be finally determined by the bank. You are:

  • 30 days for complaints related to payment products;
  • 45 days for complaints related to banking products; and
  • 30 days for complaints related to the exchange office.


The bank’s award is binding and final, provided that the complainant or FSP has the opportunity to review the decision in court.


The bank is authorized to order the complainant to facilitate the following:

  • Compensation and reimbursement;
  • Correction of incorrect data, information or statements;
  • Cessation or omission of conduct that is the subject of a complaint;
  • a formal apology; or
  • To take or not to take any action that the Bank deems appropriate.

Request for revision

The law empowers the governor of the bank to reverse the bank’s decision if either party so requests. The request for revision must be made in the form required by the fifth timetable of the Regulation and must be submitted within seven days from the date the Bank of Tanzania communicates the determination. The governor must make a decision within 21 days.

Judicial review in the High Court of the United Republic of Tanzania

If they are dissatisfied with the governor’s decision, a party can petition the High Court for a judicial review

General sanctions

The Bank of Tanzania can impose the following sanctions for non-compliance:

  • Suspension of operations for a period not exceeding one year;
  • a fine or penalty not exceeding 20 million TZS;
  • Suspension or order to withdraw any financial product or service or promotional material;
  • Suspension of executives;
  • Impose conditions, restrictions, or cancellations on the registration or license;
  • Disqualification of management from performing regulated activities;
  • Publication of names of perpetrators;
  • Referrals; or
  • other sanctions deemed appropriate. 4

COVID-19 policy measures

Undoubtedly, the current global health crisis has disrupted the stability of the financial sector and financial services providers have taken steps to deal with the situation. The crisis has created new risks for consumers, exacerbated violations of the law and endangered market integrity as financial services providers may struggle to comply with regulatory obligations. As a result, the Bank of Tanzania had to adjust the regulatory requirements, and the regulated bodies had to adjust services and products while complying with legal obligations.

Additionally, after a thorough assessment of the impact of COVID-19 on various sectors, the Bank’s Monetary Policy Committee (MPC) approved the following policies:

  • Reduction of the statutory minimum reserve (SMR) from 7% to 6% in order to provide the banks with additional liquidity;
  • reduce the discount rate from 7% to 5% so that banks can borrow additional funds from the bank at a lower discount rate and then lend them to their customers at a lower rate;
  • Reduction of discounts for Treasury bills from 10% to 5% and for government bonds from 40% to 20%, increasing the ability of commercial banks to borrow from the bank with less collateral than before;
  • Allow banks and financial institutions regulatory flexibility to discuss loan restructuring (moratorium on loan repayment) with borrowers facing financial difficulties due to the pandemic. Debt rescheduling is granted to institutions that conduct business in a transparent and impartial manner and that are determined on a case-by-case basis
  • In order to increase the daily transaction limits for customers with mobile money from 3 million TZS to 5 million TZS and to increase the daily account balance from 5 million TZS to 10 million TZS for all platforms for mobile money in order to promote cashless payments, should congestion in public spaces such as bank rooms and use of digital platforms.

The bank also confirmed that Tanzania has sufficient foreign exchange reserves to import goods and will continue to monitor the situation and take appropriate policy measures to limit the impact of COVID-19.

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