BoT to monitor TIPS services amid cost concerns

BoT to monitor TIPS services amid cost concerns

Dar es Salaam. The Bank of Tanzania (BoT) has announced plans to begin monitoring service providers on the Tanzania Instant Payment System (TIPS), which has not reduced costs as stipulated in a circular issued earlier this year.

A computer analyst programmer in the system development and support department at the BoT, Mr Octalion Urassa, told The Citizen on Monday during the ongoing 48th Dar es Salaam International Trade Fair (DITF) that so far all 39 commercial banks and six mobile companies, including Vodacom, Halopeasa, TTCL Azampesa, Tigo, and Airtel, have joined TIPs.

He, however, did not reveal what would happen to those financial institutions that were found to be going against the BoT’s directives.

“Initially, we started with a pilot project with a few commercial banks and a mobile company, but now all the service providers have been integrated into the system, which will make transactions more transparent,” he said.

This comes after BoT issued a circular on fees for the Tanzania Interbank Settlement System (TISS) under the provisions of Section 56(3) of the National Payment Systems Act, 2015, and Section 6 of the Bank of Tanzania Act, 2006, notifying the providers of the revised TISS fees.

“The review, which included consultations with stakeholders, is part of ongoing initiatives aimed at reducing the costs associated with electronic payments, promoting digital payment adoption, and decreasing cash usage,” he said.

The new TISS fee schedule took effect on May 1st, 2024. According to the circular, BoT observed that high charges are imposed on customers for transferring funds between banks through retail platforms and channels, thereby increasing the financial burden on consumers.

Regarding TIPs, Urassa explained that previously, banks used to engage in multiple bilateral agreements with other banks and mobile companies, resulting in a cumbersome network of agreements.

“After integration into the TIPs system through a unified connection, they can now transact without the need for multiple bilateral agreements,” he said.

Furthermore, he noted that the public can now make payments for goods and services from any service provider without being restricted to a specific network, unlike before.

“We issued a circular addressing the shortcomings in cost management by service providers after their integration into TIPS. This initiative began in January this year and is expected to be fully implemented by May,” Mr Urassa said.

Analysts say the initiative was good because it will facilitate a transition to a paperless system and eliminate cash-based transfers, which are often used in terrorism and money laundering.

“Storing money in the system is crucial because it allows for traceability of its origin, prevents tax evasion and reduces corruption since the system provides transparency,” said an Associate Professor of Development Economics at the University of Dar es Salaam, Abel Kinyondo.

However, he noted that if the system is not automated and therefore not affordable and efficient, then there is a problem with the system that needs to be addressed.

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Kampala — The European Commission added Air Tanzania to the EU Air Safety List, banning the airline from operating within European Union airspace. This decision follows the denial of Air Tanzania’s Third Country Operator (TCO) authorization by the European Union Aviation Safety Agency (EASA), citing significant safety deficiencies.

The EU Air Safety List includes airlines that fail to meet international safety standards. Commissioner Tzitzikostas emphasized the importance of passenger safety, stating: “The decision to include Air Tanzania in the EU Air Safety List underscores our unwavering commitment to ensuring the highest safety standards. We strongly urge Air Tanzania to take swift action to address these safety issues. The Commission has offered its assistance to Tanzanian authorities to enhance safety performance and achieve compliance with international aviation standards.”

Air Tanzania joins several African airlines banned from EU airspace, including carriers from Angola, the Democratic Republic of Congo, Sudan, and Kenya. Notable names include Congo Airways, Sudan Airways, and Kenyan carriers Silverstone Air Services and Skyward Express. The ban reflects the EU’s strict approach to aviation safety worldwide.

Source: allafrica.com

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