Bank of Tanzania, the central bank of the country, has taken over the administration of Bank M citing liquidity problems and its inability to fulfil maturing obligations.

It said that the current liquidity condition of the bank poses significant threat to the interests of Bank M’s depositors as well as it is detrimental to the overall stability of the financial system.

Accordingly, the Bank of Tanzania has suspended the lender’s board and has appointed a statutory manager to handle its affairs.

Consequently, Bank M has been barred from opening for normal businesses for up to 90 days, effective immediately.

The banking regulator said that it will determine an “appropriate resolution option,” during this period.

Assuring the public, the central bank said “it will continue to protect the interests of depositors and maintain stability of the banking sector.”

The bank had total assets of nearly $500m in May 2018, according to a note by Teneo Intelligence.

In January this year, International Monetary Fund (IMF) expressed concerns over the economic slowdown in Tanzanian economy and urged the government to take appropriate measures to address the rising amount bad loans.

Currently, around 40 lenders operate in Tanzanian banking sector, which is largely dominated by CRDB Bank and NMB Bank.