Prior to 1991, the Financial sector comprised of government owned banks namely National Bank Of Commerce (NBC) (which has since been split into two banks i.e. NMB and NBC where the latter has been taken over by the ABSA bank of South Africa), Corporative and Rural Development Bank which has since changed its name to CRDB Bank, Peoples Bank of Zanzibar, Tanzania Investment Bank and the former Tanzania Housing Bank (THB) which has since collapsed, were authorised to operate in the country. The NMB and NBC/ABSA dominate 80% of the market. The financial sector also comprises of one giant government Insurance company, the National Insurance Corporation (NIC) and three government owned pension funds, Parastatal Pension Fund, National Social Security Fund and Public Service Pension Fund. In 1991 Parliament passed a new Financial Institution and Banking Act which allowed for the establishment of private commercial banks and financial institutions and in the following year, the government passed a legislation authorising the establishment of foreign bureau's.
In 1993, the first private bank, Meridian Bank BAO opened its doors in Tanzania followed by Standard Chartered Bank, which started its operation in 1994. Meridian BIAO collapsed in early 1995 as a result of a major financial crisis within the Meridian BIAO group.
During the past seven years, there has been an increase in market activity. There are currently 19 commercial banks and 26 financial Institutions.
The insurance sector, which all along had been dominated by one player, has recently attracted many new players from UK, Kenya India and within Tanzania due to the government's liberalisation of the sector. To date there are ten insurance companies in Tanzania.
On the money and foreign exchange market, the government has since 1993 taken following liberalisation measures:
· Unification of the foreign exchange rates through exchange auctions - 1993· Introduction of the Interbank Foreign Exchange Market (IFEM) - 1994· Abolition of the Interbank Foreign Market to allow free trading among former IFEM participation -1996· Introduction of the secondary market for Treasury Bills - 1996· Introduction of REPOs - 1997
