Abstract:
The Central Bank of Tanzania (BoT) has undergone various bank regulations reviews at
different periods of time including 2008 and 2014 reviews. After the reviews some banks have
shown low compliances, collapsed and merged while others have shown high compliances and
greater performance. This study therefore, intended to assess how commercial banks in
Tanzania benefits from complying with new regulatory requirements and to determine to what
extent does compliance costs affects banks performance. The study employed an exploratory
research design using the sample size of 24 commercial banks selected from Dar es Salaam
headquarters; however, only 13 key informants were successfully reached. Primary data were
collected from compliance and risk management managers using interview guide. Thematic
analysis was used for data analysis and findings from the study show that most banks have well
benefited with the new regulatory requirements in terms of increase in profit, expansion of
more branches, ATMs and increase in number of customers. Considering the compliance costs;
findings show that to some extent some new regulatory requirements reviews have increased
operating costs to most banks. The study recommends that banks should carefully design
strategies which will help them to control NPL, manage and increase more capital and liquidity
requirements. To the regulator the study recommends that; BoT should think of reviewing
liquidity requirements and cash reserve ratio which seem to be too high and costly for most
banks to afford. The BoT can also introduce separate capital adequacy requirements as per bank size.
