Non-citizen Tanzanian Diaspora may face several situations when opening and maintaining a foreign currency bank account in Tanzania. Some of the common situations include: Meeting the minimum balance requirement; Meeting the KYC requirements; Exchange rate fluctuations; Limited banking options; Tax implications; Access to banking services particularly if they are not physically present in Tanzania.
This can make it difficult to manage their foreign currency account and access funds when needed. Political and economic instability can be another challenge. Tanzania has experienced periods of political and economic instability in the past, which can affect the stability of the banking system. Non-citizen Tanzanian Diaspora may be hesitant to invest in the country’s banking system if they perceive it to be risky.
The regulatory framework related to opening and maintenance of foreign currency bank account by
non-citizen Tanzanian Diaspora is governed by the Bank of Tanzania (BOT). BOT which is the central
bank of Tanzania on March 03, 2023 issued public notice to all banks and financial institutions,
providing clarification with regards to the existing regulatory framework related to opening
and maintenance of foreign currency bank account by Non-Citizen Tanzanian Diaspora.
Section 5 (d) of the Foreign Exchange Act, 1992 and Regulation 3(i) (c) of the Foreign Exchange Regulation – 2022, both of which relate to the regulation of foreign exchange transactions
in Tanzania. Section 5 (d) of the Foreign Exchange Act, 1992 states that the central bank of Tanzania,
has the power to regulate foreign exchange transactions in the country. This includes the power
to regulate the transfer of foreign currency in and out of Tanzania, as well as the exchange of foreign
currency for Tanzanian shillings.
Regulation 3(i) (c) of the Foreign Exchange Regulation, 2022 expands on this by specifically
stating that the Bank of Tanzania has the power to regulate the opening and maintenance of
foreign currency accounts by non-citizens in Tanzania. This includes the power to set requirements and conditions for the opening and maintenance of such accounts, as well as the power to monitor and regulate the transactions conducted through these accounts.
Both provisions allow any person whether resident or non-resident in the United Republic
of Tanzania (URT) to open and maintain a foreign currency account with a bank or financial institution following stipulated regulations by the central bank. These provisions aim to ensure that foreign
exchange transactions in Tanzania are conducted in a regulated and transparent manner, and that the country’s foreign exchange reserves are safeguarded.
Regarding customer due diligence requirements for financial institutions in Tanzania, Regulation 8 (b) of the Anti-Money Laundering Regulations, 2022 specifically outlines the requirements for verifying
the identity of customers who are non-residents or who are otherwise unable to provide physical identification documents. It has also prescribed exception that in the absence of the Tanzanian National Identity (NIDA) card, other identification documents