Abstract:
The Regulatory Requirements Reviews (RRR) carried out by the Bank of Tanzania (BoT) in 2008 and
2014 have brought both positive and negative consequences for commercial banks, some of which
led to the collapse and merger of banks. This study, therefore, analysed the effect of adjustments in
the regulatory framework on Tanzania’s commercial banks' performance. Specifically, it analysed
the performance level of both small and large banks across time. In addition, the study compared
the performance of 24 sampled commercial banks before and after RRR. Data were analysed using
descriptive statistics and Student paired t-test. The results, generally, show that Return on Equity
(ROE) and Saving Mobilisation Ratio (SMR) positively increased after RRR and their difference was
statistically significant (p-value =0.01. The findings further show that Return on Assets (ROA)
increased and Non-Performing Loan (NPL) decreased after RRR. However, their differences were
not statistically significant. Considering banks' category and time dimensions, the study concludes
that most banks performed well in terms of ROE and SMR after the implementation of RRR. However,
large banks performed better than small banks. Therefore, the study recommends that, for banks to
perform better especially the small banks, they should continue to properly utilize the resources for
compliance with the new regulatory requirements. For NPL, both banks need to take serious
measure to mitigate NPL exposures including compliance with credit risk management guideline
(2010) and regulations (2014)
