CAG censures Treasury, BoT over poor management of unclaimed cash

13Apr 2021
The Guardian Reporter
Dar es Salaam
The Guardian
CAG censures Treasury, BoT over poor management of unclaimed cash

LOOPHOLES in regulations and laxity at Treasury and Bank of Tanzania have enabled mobile money operators ignore to submit unclaimed cash in customers’ mobile wallets every five years.

Bank of Tanzania governor, professor Florens Luoga.

Controller and Auditor General, Charles Kichere said in his latest audit report that despite the law requiring electronic money issuers which are non-bank and non-financial institution to submit to BoT balances in the electronic money account that have been dormant consecutively for a period of five years, the MNOs largely ignore such need.

The CAG report said following concerns of non-compliance with regulations, BoT through letter/circular with Reference No.  LB.422/535/02/11 dated 25th September, 2019 ordered MNOs to remit all unclaimed balances held in trust/electronic money accounts.

“The review of account statement for unclaimed balances from licensed electronic money Issuers revealed that as of June 2020, there were a total of 9.7bn/- remitted to BoT by the licensed MNOs,” the report said adding that by October 2020, all MNOs had remitted  a total of 11.1bn/-.

The remitted unclaimed financial assets submitted by MNOs, included over 9bn/- from Vodacom Tanzania Plc’s M-Pesa platform; over 1.35bn/- from Tigo Tanzania’s Tigo-Pesa platform; over 726.18m/- from Airtel Tanzania’s Airtel Money platform and over 38.56m/- from Zantel’s EzyPesa platform.

The CAG however noted that,  BoT officials did  not  conduct  verification  of remitted unclaimed financial assets made by MNOs as required by the law hence exposing the financial assets . He said the regulatory weaknesses which are evident both at the central bank and Treasury are a result of poor regulations and vague working arrangements.

“Despite the fact that all four MNOs remitted unclaimed balances to BoT, up to the time of this audit the bank did not verify the amount so remitted to ascertain that it was the actual amount pending to MNOs. The interviewed BoT Officials revealed that BoT sampled only those MNOs with high risk by using RBS Manual to the extent that it was not possible to verify each MNO,” the CAG report added.

“Furthermore, it was revealed that MNOs normally attach together with the remittance letter, a list of individuals against their balances for verification. However, from the four electronic money issuers, we noted the list from EzyPesa only,” the CAG stated.

“Consequently, BoT could not ascertain on whether the amount remitted was the actual unclaimed customer balances with more than five years of age in 75 percent of the electronic money issuers,” the report noted saying for instance, BoT officials indicated that  among  the  weakness  noted  during  their  onsite  examination,  was  a charge of 600/- maintenance fee for dormant customer balances in the electronic money accounts aged below five years without approval by the central bank.

The CAG conducted the audit following concerns that there are a number of challenges facing management and disposal of abandoned assets with estimates indicating that as of June 2016, the financial assets totalled 89.9bn/- being held MNOs, banks and other financial institutions.

“Efficient management of unclaimed assets would also support achievement of  Vision  2025  which  aims  at  attaining  high  quality  livelihood  for  all Tanzanians  by  2025.  It will similarly assist in promoting achievement of United Nation’s 2030 Agenda for Sustainable Development Goal number 17 which emphasizes and requires developing countries to strengthen domestic  resource  mobilization  and  identification  of  additional  financial resources  from  multiple  sources,” the report noted.

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