Foreign Exchange Exposure Limits - Bank of Tanzania

Banking and Financial Institutions (Foreign Exchange Exposure Limits) GOVERNMENT NOTICE No. 369 published on 12/12/2008 THE BANKING AND FINANCIAL INSTITUTIONS (FOREIGN EXCHANGE EXPOSURE LIMITS) REGULATIONS, 2008 ARRANGEMENT OF REGULATIONS Regulation Title PART I PRELIMINARY PROVISIONS 1. Short title 2. Application 3. Interpretation 4. Objectives PART II ELIGIBILITY FOR FOREIGN EXCHANGE OPERATIONS 5. Board responsibility 6. Foreign currency lending 7. Foreign exchange risk limit 8. Solo and consolidated application 9. Limits on placements 10. Penalty charge 11. Approval of correspondents PART III MISCELLANEOUS PROVISIONS 12. Reporting requirements 13. Failure to report 14. Misrepresentation of information 15. Sanctions and penalties Banking and Financial Institutions (Foreign Exchange Exposure Limits) GOVERNMENT NOTICE No. 369 published on 12/12/2008 THE BANKING AND FINANCIAL INSTITUTIONS ACT (CAP.

342) ___________ REGULATIONS ___________ (Made under section 71) __________ THE BANKING AND FINANCIAL INSTITUTIONS (FOREIGN EXCHANGE EXPOSURE LIMITS) REGULATIONS, 2008 PART I PRELIMINARY PROVISIONS Short title 1. These Regulations may be cited as the Banking and Financial Institutions (Foreign Exchange Exposure Limits) Regulations, 2008 and shall come into operation on the date of publication in the Gazette. Application 2. These Regulations shall apply to all banks and financial institutions. Interpretation 3. In these Regulations, unless the context requires otherwise- “Act” means the Banking and Financial Institutions Act; “authorised foreign exchange dealer” means a bank or financial institution authorised to operate in the Inter-bank Foreign Exchange Market; “bank” has the meaning ascribed to it in the Act; “Bank” means the Bank of Tanzania; “core capital” or “tier 1 capital” and has the meaning ascribed to it in the Act; “correspondent bank” means a foreign bank which has correspondent relationship with a bank or financial institution in Tanzania; “first class international bank” has the meaning ascribed to it in the Act; Cap. 271 “foreign currency” has the meaning ascribed to it in the Foreign Exchange Act; “foreign currency assets” means all assets denominated in foreign currency; “foreign currency liabilities” means all liabilities denominated in foreign currency; “foreign exchange placement” means foreign exchange held or placed with other banks or financial institutions outside Tanzania; “interbank foreign exchange market (IFEM)” means foreign exchange spot, forward or such other foreign exchange trading mechanism as authorised to be undertaken in the United Republic of Tanzania in accordance with rules, guidelines, regulations and directives Banking and Financial Institutions (Foreign Exchange Exposure Limits) GOVERNMENT NOTICE No. 369 published on 12/12/2008 issued by the Bank; “long position” means the holding by a bank or financial institution of a currency, security or other asset for its own account in excess of all its contractual spot and forward transaction commitments in that currency, security or other asset; “net open position” means the net sum of all foreign currency assets and liabilities of a bank or financial institution inclusive of all of its spot and forward transactions and off balance sheet items in that foreign currency; “off-balance sheet exposure” has the meaning ascribed to it in the Act; “short position” means the holding by the bank or financial institution of a currency, security or other asset for its own account less than all its contractual spot and forward transaction commitments in that...

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