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Sovereign Banking

Bank M is a commercial bank with a significant focus on holistic banking business with Government departments and Government managed projects and companies The target Government customers are identified as entities owned or managed by the government directly or indirectly and engaged in activities with a developmental orientation.

In order to meet the requirements of the above identified business groupings, we have, on offer, products and services classified into the following categories:

 
Deposit Products

Bank M offers three broad categories of deposit products, classified on their tenor. They are

  • Demand Deposits are deposit accounts where complete liquidity of the deposited funds is assured. The most common demand deposit accounts on offer are the following:

    • Current Accounts

      A Checking Account, which is specifically designed to accommodate the wide variety of your business needs. Current accounts, which require maintenance of only the balances adequate to cover the amounts of cheques issued/ to be issued, are available in TZS, USD, EUR and GBP. The minimum balances required to be maintained in Savings accounts are as follows:

      Currency of Account Minimum Balance
      Tanzanian Shillings 1,000,000.00
      United States Dollars 1,000.00
      Euro 1,000.00
      Sterling Pound 1,000.00

      On opening the account with us, you will be issued with a personalized cheque book, which can be used to settle any business or personal payments. You will be provided with Statements of Account on any periodicity of your choice, say on a daily, weekly, monthly, quarterly basis, free of cost.

      For charges applicable to transactions in the account, issuance of cheque books and additional statements of account, please refer to our Schedule of Charges

    • SWEEP Current Accounts

      This is a Current Account with significant value added features, ideally suited for large corporations. In case your current account is likely to carry large credit balances on a regular basis, you can choose to maximize returns from the surplus liquidity by opting for a Current Account with Sweep facility. The account sweeping facility is an automated fund transfer service which assists you in optimizing liquidity while enhancing returns. This service gives you the option of leaving standing orders with the bank for maintenance of only a minimum balance to be stipulated by you in any of your current accounts and to automatically “sweep” any balances above that level into an interest bearing account. In case of receipt of any cheques larger than the minimum balance maintained, the bank’s accounting system will automatically transfer the required amount in shortfall from the interest bearing account to your operating account.

      These accounts are also ideal for Head Quarters/Regional/District Branches accounting, whereby surplus funds in the branch/ subsidiary’s account can be pooled into the Head Quarter account or vice versa. This facility can be extended to accounts maintained at different offices across various regions/ districts. This facility, thus, provides finance professionals in large government departments with an efficient and effective way of ensuring that regional/district office accounts maintain only the stipulated balances and the surplus liquidity would be centrally available for yield enhancement, at pre determined times. While retaining the flexibility of a current account, the customer earns an interest linked to the market yields.

      Current Accounts with Sweep facility are available in TZS, USD, EUR and GBP. The minimum balances required to be maintained in Current accounts are as follows:

      Currency of Account Minimum Balance
      Tanzanian Shillings 100,000,000.00
      United States Dollars 100,000.00
      Euro 100,000.00
      Sterling Pound 100,000.00

      For charges applicable to transactions in the account, issuance of cheque books and additional statements of account, please refer to our Schedule of Charges

    • Savings Accounts

      Bank savings accounts are a critical part of every individual’s financial domain. Savings accounts offer you liquidity with reasonable yield. In other words, you can make withdrawals easily from your savings account while the resultant balance in the account earns interest. This type of account is designed to simply hold money that you do not need immediate access to. When contrasted with checking accounts, bank savings accounts pay interest on the balances in the account.

      Savings Accounts are available in TZS, USD, EUR and GBP. The minimum balances required to be maintained in Savings accounts are as follows:

      Currency of Account Minimum Balance
      Tanzanian Shillings 1,000,000.00
      United States Dollars 1,000.00
      Euro 1,000.00
      Sterling Pound 1,000.00

      On opening a savings account with us, you will be issued with a personalized cheque book, which can be used to settle any personal payments. You will be provided with Statements of Account on any periodicity of your choice, say on a daily, weekly, monthly, quarterly basis, free of cost. For charges applicable to transactions in the account, issuance of cheque books and additional statements of account, please refer to our Schedule of Charges.

      *Savings Accounts are currently on offer only for management staff of client government departments.

  • Fixed Deposits are deposits which are fixed for a term from the date of issue at a pre determined rate of interest. Bank M has the following fixed deposits on offer:

    • MI Fixed Deposits

      MI Fixed deposits are fixed deposits which offer the facility of payment of interest on monthly basis or on any longer periodicity required by you. The deposit is fixed for a minimum tenor of 90 days or more. Interest is paid out on monthly basis or on any longer periodicity as desired by the customer.

      MI fixed deposits are available in TZS, USD, EUR and GBP. The minimum deposit amounts are as follows:

      Currency of Account Minimum Balance
      Tanzanian Shillings 100,000,000.00
      United States Dollars 100,000.00
      Euro 100,000.00
      Sterling Pound 100,000.00

      Interest Rates on MI Fixed deposits are negotiable but are normally a function of the value of connection, the quantum of deposit and the ruling 91 day treasury bills yield.

    • RE Fixed Deposits

      RE Fixed deposits are fixed deposits where interest is earned and re-invested every quarter and paid on the maturity date along with the principal amount. RE Fixed deposits are fixed for a tenor of more than 90 days. Because of the power of compounding, RE Fixed deposits improve the yield to a rate higher than the interest rate.

      RE Fixed deposits are available in TZS, USD, EUR and GBP. The minimum deposit amounts are as follows:

      Currency of Account Minimum Balance
      Tanzanian Shillings 100,000,000.00
      United States Dollars 100,000.00
      Euro 100,000.00
      Sterling Pound 100,000.00

      Interest Rates on RE Fixed deposits are negotiable but are normally a function of the value of connection, the quantum of deposit and the ruling 91 day treasury bills yield for LCY deposits and the 3 Month LIBOR for the other currencies.

      RE Fixed deposits come with an Auto Rollover Option, which can be exercised at the time of booking the deposit, whereby the bank agrees that, in the absence of any instructions to the contrary, it will suo moto rollover the deposit on maturity, at no extra cost.

    • UN Fixed Deposits

      UN fixed deposits are fixed deposits with a pre approved line of credit. The fixed deposits will be taken as RE Fixed deposits for a tenor of more than 30 days where interest on the deposit is earned and re-invested and paid on the maturity date. The pre-approved line of credit is normally up to 75% of the amount deposited. The interest rate on the utilized portion of the line of credit is deducted from the maturity proceeds of the fixed deposit.

      UN Fixed deposits are available in TZS, USD, EUR and GBP. The minimum deposit amounts are as follows:

      Currency of Account Minimum Balance
      Tanzanian Shillings 100,000,000.00
      United States Dollars 100,000.00
      Euro 100,000.00
      Sterling Pound 100,000.00

      Interest Rates on UN Fixed deposits are negotiable but are normally a function of the value of connection, the quantum of deposit and the ruling 91 day treasury bills yield for LCY deposits and 3 Month LIBOR for the other currencies. Interest rates on the pre approved line of credit is also negotiable but will be a mark up over the cost of the deposit, which is calculated as the applicable interest rate plus the cost of statutory reserve on the deposit.

      UN Fixed deposits come with an Auto Rollover Option, which can be exercised at the time of booking the deposit, whereby the bank agrees that, in the absence of any instructions to the contrary, it will suo moto rollover the deposit and the line of credit on maturity, at no extra cost.

    • CLUSTER Fixed Deposits

      CLUSTER Fixed Deposit is one where a larger fixed deposit is booked in multiple units for smaller amounts. Cluster Fixed deposits allow a partial liquidity option in the event of an unexpected requirement for part of the booked amount. As the deposits are booked in smaller units, you are allowed the flexibility of prematurely withdrawing some of the units of deposit, while the others will continue to earn interest.

      CLUSTER Fixed deposits are available in TZS, USD, EUR and GBP. The minimum deposit amounts are as follows:

      Currency of Account Minimum Deposit Value Minimum Unit Value
      Tanzanian Shillings 100,000,000.00 5,000,000.00
      United States Dollars 100,000.00 5,000.00
      Euro 100,000.00 5,000.00
      Sterling Pound 100,000.00 5,000.00

      Interest Rates on CLUSTER Fixed deposits are negotiable but are normally a function of the value of connection, the quantum of deposit and the ruling 91 day treasury bills yield for LCY deposits and the 3 Month LIBOR for the other currencies. Interest on the units withdrawn prematurely will be paid interest at the ruling Overnight Inter Bank rates for the respective Currencies.

      CLUSTER Fixed deposits come with an Auto Rollover Option, which can be exercised at the time of booking the deposit, whereby the bank agrees that, in the absence of any instructions to the contrary, it will suo moto rollover the deposit on maturity, at no extra cost.

  • Hybrid Deposits are deposit accounts which, while being interest bearing, carry liquidity options.

    • Money At Call

      Occasions are many in the management of government finance that you are faced with uncertainty over payout and realizations dates. As a result, government departments/companies and their regional/ district offices , in order to run their operations without serious cash flow mismatches, are compelled to meet current liquidity needs by maintaining float funds in zero interest current accounts. Liquidity vs Yield – that is the classical dilemma for all modern day finance professionals. For those government departments and companies seeking to optimize liquidity while maximizing yield, Bank M introduces Money AT Call, a packaged product combining the liquidity of a current account with the yields of a fixed deposit.

      Money AT Call is accepted for any period of time. For funds which remain with the bank for periods shorter than 3 days, no interest will be paid.

      Money AT Call accounts are available in TZS and USD. The minimum balances required to be maintained in Money AT Call accounts are as follows:

      Currency of Account Minimum Balance
      Tanzanian Shillings 100,000,000.00
      United States Dollars 100,000.00

      Interest Rates on Money AT Call accounts are negotiable but are normally a function of the value of connection, quantum of deposits and the overnight Inter Bank Rates. Interest will be payable on the deposit from Day 1 and up to the Day of Withdrawal – 1.

      For withdrawal of any amounts from Money AT Call accounts, all you have to do is send us your instructions to transfer the required amount to your Current Account with us or any other bank in Tanzania. If you require the funds in any of your accounts at another bank, we would transfer the funds by SWIFT at no extra cost. In addition to the transfer being free of cost, these transfers are covered by our Money. back guarantee, the only Service Standard Guarantee (SSG) being offered by any bank in the African continent. These SSGs guarantee that any domestic SWIFT transfer will be completed within 1 hour from the time of request and an overseas SWIFT transfer within 4 hours from the time of request. Our guarantees assure the client that within these stipulated time frames, we would email them the transmitted SWIFT copy.

Loan Products

Bank M offers two broad categories of loan products, classified on the tenor of the loans. They are

  • Short Term Credit Facilities are credit facilities which are repayable in less than 1 year. The most common Short Term Credit Facilities on offer by Bank M for Institutional customers are the following:

    • Temporary Overdrafts

      Temporary Overdrafts are facilities repayable on demand, which are made available to meet temporary cash flow mismatches, as it is always presumed that a Government department/ company will be largely reliant on budget allocations and other governmental support as financing for it’s activities. The approval process involves evaluation of the security being offered for the requested facility, acceptance of the approved facility, documentation to cover the terms and conditions of the approval along with the security cover and drawdown of the approved facility. Overdrafts are similar to current accounts in every way except that the account will be allowed to be overdrawn up to the amount of approved Limit.

      The maximum amount of borrowings of the customer, including the overdraft facility, which can be approved by us is regulated by the Bank of Tanzania, the local banking regulator, and is currently fixed at 25% of our “core capital” for a single customer or for a group of companies. Core Capital of a bank and it’s Single Borrower Limits (SBL) and Group Exposure Limits (GEL) are laid down by the Bank of Tanzania vide, The Credit Concentration and other Exposure Limits Regulations, 2008.

      Overdrafts are approved by Bank M currently in TZS, USD, EUR and GBP. Interest Rates on Overdrafts are negotiable but is normally a function of the value of connection, the quantum of the overdraft and the ruling treasury bills yield for LCY Overdrafts and 3 Month LIBOR for the other currencies. Interest Rates are offered by us on a Fixed or Floating Basis. Floating Rates are on offer linked to Money Prime Rate, which is our Base Rate or as a mark up over 91, 182 or 365 day treasury bills for LCY overdrafts and 3 Month ,6 Month or 1 year LIBOR of the respective currencies. Fixed Rate overdrafts normally carry a small premium over those offered on floating rates. Interest is applied on daily balances of overdrawn amounts and is applied and payable monthly in arrears.

    • Insurance Premium Financing

      Bank M, through it’s Insurance Premium Financing (IPF) product, provides financing to corporates,institutions, Government departments and companies to pay for their annual insurance premium. The rationale is to give customers an opportunity to spread premium payment over a pre-determined period of up-to eleven months at a fixed rate of interest on an Equated Monthly Installment (EMI) basis. A loan equivalent to the annual premium payable by the insured will be advanced, and disbursed direct to the insurance company. The approval process is unique for an IPF which is dependant on the Insurers undertaking to refund unpaid premia, in the event of default on any of the matured installments. This necessitates an evaluation of the credit worthiness and standing of the insurer in addition to the borrowing customer. In order to expedite the process, Bank M has pre approved credit lines on all major local Insurers.

      The maximum amount of borrowings of customer, including IPF, which can be approved by us is regulated by the Bank of Tanzania, the local banking regulator, and is currently fixed at 25% of our “core capital” for a single customer or for a group of companies. Core Capital of a bank and it’s Single Borrower Limits (SBL) and Group Exposure Limits (GEL) are laid down by the Bank of Tanzania vide, The Credit Concentration and other Exposure Limits Regulations, 2008.

      IPF is currently being offered by Bank M in TZS, USD, EUR and GBP. Interest Rates on IPF is negotiable but is normally a function of the credit worthiness and standing of the insurer, the value of connection with the borrower, the quantum of the loan and the ruling treasury bills yield for IPFs in LCY and 3 Month LIBOR for the other currencies. Interest Rates are offered by us on a Fixed Basis.

  • Term Loans are credit accommodations which are repayable over a pre determined period of time. Bank M has the following Term Loans on offer:

    • Term Loans

      Term Loans are credit facilities granted for periods in excess of one year for financing of capital expenditures and investments. The maximum tenor of a term loan that Bank M approves is normally for a period of 3 years, which can extended to 5 years for exceptionally good relationships. The approval process involves evaluation of the credit worthiness of the customer, the security being offered for the requested facility, acceptance of the approved facility, documentation to cover the terms and conditions of the approval along with the security cover and drawdown of the approved facility.

      The drawdown of the facility can be in stages or in one shot depending on the purpose for which financing is extended. Repayments are normally approved to be in installments over the tenor of the loan with or without a moratorium period, which is linked to the cash flow generation of the customer. Repayments are normally in equated installments or in Step up or Step down installment structures, depending on the cash flows of the customer. For customers of exceptionally good standing, when the cash flows so permit, bullet repayments can also be considered.

      The maximum amount of borrowings of customer, including Term Loans, which can be approved by us is regulated by the Bank of Tanzania, the local banking regulator, and is currently fixed at 25% of our “core capital” for a single customer or for a group of companies. Core Capital of a bank and it’s Single Borrower Limits (SBL) and Group Exposure Limits (GEL) are laid down by the Bank of Tanzania vide, The Credit Concentration and other Exposure Limits Regulations, 2008.

      Term Loans are approved by Bank M currently in TZS, USD, EUR and GBP. Interest Rates on Term Loans are negotiable but is normally a function of the value of connection, the quantum of the loan and the ruling 1 year treasury bills yield for LCY Term Loans and 1 year LIBOR for the other currencies. Interest Rates are offered by us on a Fixed or Floating Basis. Floating Rates can be offered linked to Money Prime Rate, which is our Base Rate or as a mark up over the yield of 365 day treasury bills for LCY Term Loans and 1 year LIBOR of the respective currencies. Fixed Rate overdrafts normally carry a small premium over those offered on floating rates. Interest is applied on reducing balances and is applied and payable monthly in arrears.

    • Asset Financing

      Asset Financing is similar to Term Loans in all respects barring that this is a specialized form of financing for purchase of equipments or vehicles required in the running of a business. The primary security for Asset Financing is normally the asset being financed. The financing available under this product is up to 70% of the cost of the asset on C&F basis. The credit approval process is more stringent in this form of financing as it is secured generally by moveable security.

      The drawdown of the facility is in one shot. Repayments are normally approved to be in installments over the tenor of the loan with or without a moratorium period, which is linked to the cash flow generation of the customer. Repayments are normally in equated installments or in Step up or Step down installment structures, depending on the cash flows of the customer. For customers of exceptionally good standing, when the cash flows so permit, bullet repayments can also be considered.

      The maximum amount of borrowings of the customer, including Asset Financing, which can be approved by us is regulated by the Bank of Tanzania, the local banking regulator, and is currently fixed at 25% of our “core capital” for a single customer or for a group of companies. Core Capital of a bank and it’s Single Borrower Limits (SBL) and Group Exposure Limits (GEL) are laid down by the Bank of Tanzania vide, The Credit Concentration and other Exposure Limits Regulations, 2008.

      Asset Financing is currently being approved by Bank M in TZS, USD, EUR and GBP. Interest Rates on Term Loans are negotiable but is normally a function of the value of connection, the quantum of the loan and the ruling 1 year treasury bills yield for LCY Term Loans and 1 year LIBOR for the other currencies. Interest Rates are offered by us on a Fixed or Floating Basis. Floating Rates can be offered linked to Money Prime Rate, which is our Base Rate or as a mark up over the yield of 365 day treasury bills for LCY Term Loans and 1 year LIBOR of the respective currencies. Fixed Rate overdrafts normally carry a small premium over those offered on floating rates. Interest is applied on reducing balances and is applied and payable monthly in arrears.

Trade Finance Products and Services

Trade Finance Products and Services, on offer from Bank M, for Government departments and companies can be broadly classified into the following two categories:

  • Non Funded Trade Finance Products: The most commonly used non funded Trade products are Letters of Credit and Guarantees.

    • Letters Of Credit

      LETTERS OF CREDIT are credit instruments, similar in nature to a Guarantee, issued by a Bank in favor of a beneficiary, which substitutes the bank’s credit worthiness for that of the applicant. The business of Letters of Credit are governed by the Uniform Customs and Practices for Documentary Credits (UCPDC) and is unique in the sense that the liability of the bank to pay is independent of that of the Applicant and the goods covered by the credit. Letters of credit can either be Import letters of credit or Export letters of credit. Import Letters of Credit are established by Bank M on behalf of customers to cover their import transactions. Bank M offers various types of Import letters of credit including revolving letter of credit, installment letter of credit, advance payment letters of credit, red clause letters of credit, back to back letters of credit, transferable letter of credit etc, depending on the client’s requirements, credit worthiness and the suitability of the product to the transaction. Further, Bank M also advises and confirms Letters of Credit opened by overseas Correspondent Banks in favor of Tanzanian exporters.

    • Guarantees

      GUARANTEES are instruments issued by the bank that secures its beneficiary against losses resulting from the failure of the bank’s customer to perform a financial or non-financial contractual obligation. The bank promises to make a monetary payment under the conditions specified in the guarantee. Guarantees are clean credits which do not require the submission of shipping documents and are rarely used as a payment mechanism for movement of goods. Bank M offers several types of guarantees such as Bid bond, performance guarantee, advance payment guarantee, shipping guarantee, custom bonds etc.

      The maximum amount of borrowings of a customer, including non funded trade finance products, which can be approved by us is regulated by the Bank of Tanzania, the local banking regulator, and is currently fixed at 25% of our “core capital” for a single customer or for a group of companies. Core Capital of a bank and it’s Single Borrower Limits (SBL) and Group Exposure Limits (GEL) are laid down by the Bank of Tanzania vide, The Credit Concentration and other Exposure Limits Regulations, 2008.

      The tariff on non funded trade finance transactions are normally the equivalent of 1% of the value of the transaction for every quarter of validity, but is negotiable and would be dependant on the value of connection, security cover and the tenor.

      All Non Funded Trade Products are covered by our Money. back guarantee, the only Service Standard Guarantee (SSG) being offered by any bank in the African continent. These SSGs cover that Letters of Credit or Guarantees will be issued within 4 hours from the time of request.

  • Trade Services can be broadly classified under Fund Transfer Products and Documentary or Clean Collection products, of which only the former are normally required by Institutional customers.

    • Funds Transfer Products can be further classified into Paper based products and electronic Funds Transfer products. Paper Based Funds Transfer products are Banker’s Cheques and Demand Drafts, while SWIFT transfers are the common Electronic Funds Transfer products.
      •  Banker's Cheques

        Banker's Cheques are cheques issued by the bank to meet the requirements of clients who have transactions calling for higher level of payment assurance. Bank M issues Bankers Cheques in TZS and USD on collection of a fee of TZS 10,000.00 and USD 10.00 respectively. The charges are negotiable depending on the value of connection and the volume of transactions.

        Issuance of Bankers Cheques is covered by our Money. back guarantee, the only Service Standard Guarantee (SSG) being offered by any bank in the African continent. These SSGs guarantee that the cheques will be issued within 8 minutes from the time of receipt of the applications at our counters.

      •  Demand Drafts

        Demand Drafts are cheques issued by the bank at a customer’s request and is similar to a Bankers Cheque in several ways. The one major difference between the two instruments is that while a Bankers Cheque is drawn on the issuing bank itself, the Demand Draft is drawn payable at a bank in another location. Bank M issues Demand Drafts in USD and Indian Rupee on collection of a fee of USD 40.00. Demand Drafts issued at the request of individuals for certain specified personal purposes carry a special pricing of USD 15.00. The charges are negotiable depending on the value of connection and the volume of transactions.

        Issuance of Demand Drafts is covered by our Money. back guarantee, the only Service Standard Guarantee (SSG) being offered by any bank in the African continent. These SSGs guarantee that the demand drafts will be issued within 4 hours from the time of receipt of the applications at our counters.

      •  SWIFT Transfers

        SWIFT Transfers are electronic funds transfers using the global financial messaging service of SWIFT. Transfers using SWIFT are assured to be error free and ensure seamless delivery on the pre determined value date. SWIFT transfers can be executed by us in TZS, USD, Sterling Pound, EUR, Indian Rupee, South African Rand and Kenya Shillings. SWIFT transfers normally carry a fee of USD 50.00 for overseas transfers and TZS 5,000.00 for a domestic transfer.

        SWIFT Transfers are covered by our Money. back guarantee, the only Service Standard Guarantee (SSG) being offered by any bank in the African continent. These SSGs guarantee that in case of overseas transfers, the transmitted SWIFT copy will be emailed to the customer within 4 hours from the time of receipt of the applications at our counters. As regards domestic SWIFT transfers, our SSG assures customers delivery of the transmitted SWIFT copy within 1 hour from the time of receipt of the application at our counters.

In addition to the abovementioned business products and services, Bank M also supports the business activities of our institutional customers with the following value added services unique to the African market:

  • Money. mann, a unique cash pick up/ delivery service from/to the customer’s location.

  • Money. mail, an unmatched pick up service from/to the client’s location for all non – cash documents.

  • Money. safe, a safe drop facility for bulk cash after office hours.