Banking in Tanzania has been in operation since the 1900s. However, modern banking was introduced by colonialists to facilitate their economy. Now in the world, electronic or e-banking has become a new and more effective way to deal with financial transactions, but in Tanzania, electronic banking has not been able to garner much attention despite receiving an overwhelming response on its application and reception. 

What Is E-Banking?

Electronic banking implies the provision of banking services by electronic means. E-banking has been used for quite some time in the form of automatic teller machines (ATMs) and telephonic transactions. The newest addition to e-banking has been internet banking which also includes mobile banking and allows you to do transactions anywhere, anytime. 


For customers, internet banking has been of great use, and it has made the banking industry more efficient. People around the world have gotten used to banking at their fingertips, and it also saves costs for banks. 


Many banks and businesses have started to depend on multiple electronic banking channels, including ATMs, internet banking, and online bank transfer by mobile banking. However, electronic banking comes with a fair share of financial threats and risks. Cyber crimes have become more common with electronic banking in use, and Tanzania needs to address this issue and find a solution before it gets out of hand.


Like other developed countries of the world, Tanzania is also adapting to the change, and the emerging ICT technology is taking the banking sector by ATMs, internet banking, and point of sale payments by storm. These channels have made the transfer of payment easier for the customers; they don’t need to stand and wait in long lines to make payments. Now they can pay from anywhere or withdraw their money anytime they want. 


On the one hand, e-banking has made banking easier and more efficient; on the other, it has created new problems like cyber crimes.

Challenges Of E-Banking

The laws protecting banking sectors in Tanzania are outdated and ineffective in dealing with future challenges that might arise due to ICT development. These problems involve the increase in cybercrimes such as frauds and unauthorized transactions, but these problems can be solved by applying an effective policy with a good institutional framework. 


According to the Law Reform Commission of Tanzania (2005), the country does not have any policy regulating electronic banking. These policies do not cover all aspects of e-banking because they do not adequately cover misuse of computers or e-banking channels like ATMs and mobile banking. They are silent when an e-banking fraud takes place. 


Many laws and acts have failed to identify the challenges and solutions related to electronic banking. The institutional framework of ICT does not protect the banks and customers in e-banking transactions.


Other than the weaknesses in the current policies regarding ICT and electronic banking in Tanzania, there are basic omissions that ought to be addressed to develop the e-banking sector in the country. The BoT guidelines (2007) do not address all the issues related to liabilities in the event of a loss. This condition in Tanzania is worse because banks are able to make terms and decisions without discussing them with customers unilaterally. 


These conditions are unilateral because banks create them by keeping their best interest in mind and at the cost of the customer’s interest. Hence, these banks must be guided to make fair terms that take the interest of both parties into credit, and in order to do that, there is a need to build comprehensive policies for these banks and financial institutions.


If you want advice regarding banking in Tanzania, contact Shikana Group, and their team of professional investment and legal advisors will provide you with all the help you need. They provide advice related to investment, businesses, and corporate law matters.


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