directorate of banking supervision directorate of ... - Bank of Tanzania

CHAPTER 4
DEVELOPMENTS
IN BANKING
SUPERVISION
4.0 OVERVIEW
During the year under review
the Directorate continued to
work on various contemporary
issues in banking supervision
so as to ensure soundness and
stability of the banking system.
4.1 RISK BASED
SUPERVISION
PROJECT
The process of migrating
from traditional supervision
approach to Risk Based
Supervision (RBS) has reached
an advanced stage. During the
year under review the
Directorate finalized the Risk
Based Supervision Framework.
This provides a detailed
description of the Risk Based
Supervision framework to be
adopted by the Bank of
Tanzania for supervision
of banks and financial
institutions.
During the year 2006 the
Directorate reviewed Risk
Management Programmes
(RMPs) submitted by banks
and financial Institutions.
The Directorate continued
conducting pilot RBS
examinations on selective basis
to some banks and financial
institutions. In the year 2007
the Directorate plans to finalize
RBS examination manual
and improvement of off site
surveillance ready for full
implementation of Risk Based
Supervision approach.
4.2 BASEL II AND WAY
FORWARD FOR
TANZANIA
The Bank of Tanzania is in
the process of creating an
environment which will be
supportive at the point of
adoption of Basel II.
During the year under review
the Bank of Tanzania has been
working on the prerequisites
for the full implementation of
Basel II so as to lay down a
strong foundation for the full
implementation of Basel II in
Tanzania. These pre-requisites
include:
2006 Banking Supervision Annual Report
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