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Dar es Salaam — Long-serving bank chief executives and board members will soon exit their positions after the central bank capped their tenure at 10 years.

The new regulations which were announced by the Bank of Tanzania (BoT) this week, seek to improve governance among banks and other financial institutions by establishing standards for corporate governance, processes and structures, among other objectives.

Dubbed “Banking and Financial Institutions (Corporate Governance) Regulations,” these also aim to promote and maintain public confidence in banks and financial institutions; and provide guidance to directors for proper discharge of their responsibilities.

“A board member or a chief executive officer of a bank or financial institution shall not hold office for a consecutive period of more than ten years,” state the regulations in part.

The regulations explain that if a bank or financial institution was formed through merger, acquisition or takeover, the period of 10years will include the pre and post combination years of a board member or CEO.

The regulations also stipulate the cooling-off period is at least three years. That means, a person who has served as board member or CEO of a bank or financial institution for consecutive ten years will not qualify for appointment in his former bank or its subsidiaries in any capacity until after a period of three years.

“A board member or chief executive officer of a bank or financial institution who has served for a period of 10 years or more by the date these regulations come into effect shall have a moratorium period of two years.” – Allafrica.com