A Research Dissertation Submitted in Partial Fulfilment of the Requirements for the Award of the Degree of Master of Business Administration in Corporate Management (MBA-CM) of Mzumbe University Dar es Salaam Campus College
Fighting against money laundering is an ongoing priority for governments around the world; governments have turned their focus on banks and financial institutions as agents to track money laundering. Like any other Governments, Tanzanian extensively made attempt supporting international schemes to deal with this crime of money-laundering, therefore has enacted Money Laundering legislation that effectively request Financial Institutions and banks to know their customers and to track suspicious transactions. However, Know Your Customer remain a relatively under-studied problem in East Africa, Tanzania being part thereof, there is no much data on the importance, extent and effectiveness of know your customer procedure to banks hence this measure has become ineffective to bring desired result.
This study is on effectiveness of Know Your Customer (KYC) policy in controlling money laundering in Tanzania through commercial banks. Bank of Africa Tanzania limited was taken as a case study to determine its practice on implementation of KYC policy in combating money laundering. The study explores the existing initiatives aimed at addressing money laundering. Interview and structured questionnaires were applied as methods for collecting data, where two types of data were used, the primary and the secondary data. The researcher collected data from three different types of respondents. These include BOA Branch Managers of Msimbazi and Aggrey Branch, Front line staffs namely Tellers and customer services staffs who are daily dealing with customers.
It is argued in this dissertation that the major problem with Know Your Customer Policy in Tanzania is the lack of proper documentation like National IDs, verification agency and enforceability of regulations issued by Financial Intelligent Unit (FIU) that plays a role in the fight for money laundering. In addition, Ant-money laundering Training and emphasis and monitoring amongst and within financial institutions is extremely weak.
The study recommends for establishment of national database for money laundering cases which can be shared amongst commercial banks, FIU and Bank of Tanzania (BOT) should monitor if Banks comply with Anti-money laundering policy, and there should be ongoing trainings on know your customer.