Bank Confidentiality An Examination of Law and Policy in Tanzania

ABSTRACT 

The concept of bank customer relation in Tanzania is based on contract. It has been repeatedly argued that the success of the organization specifically in banking depends greatly on the needs of the customers. In order to be able to achieve that, it is necessary to understand customer and their service to enhance performance and profitability level of bank. In this sense a banker is under the duty not to disclose to the third parties information about its customers accounts affairs except when legally called upon to do so or at the request of the customer. The specific aim of this research was intended to look the confidentiality and transparence of the information as an issue not only for customer interest but also for public interest. The research further examined whether the level of law and policy of the bank confidentiality in Tanzania maintain adequate provisions to face challenges posed customers relation towards the bank. The law imposes many injunctions for any one failed to keep secrecy. The issue is how many bank officers, customers know and how far they breach that duty. The remedies for breach of respective duties for bank or customers will be critically examined. In this research, the research discusses the overriding importance of rule of law as prerequisite to a functioning banking sector specifying on confidentiality point of view. The research proposes some recommendation.

TABLE OF CONTENTS

DECLARATION vii

APPROVAL viii

DEDICATION

ACKNOWLEDGEMENT ix

ABSTRACT x

LIST OF CASES xi

LIST OF STATUTES xiii

LIST OF CONVENTIONS xv

LIST OF ACRONYMS AND ABREVIATION xvi

CHAPTER ONE:THE PROBLEM AND ITS SCOPE 1

1.1 Introduction 1

1.2 Background of the Study 1

1.3 Statement of the Problem 4

1.4 Purpose of the Study 5

1.5 Research Objectives 5

1.5.1 Specific objectives 6

1.6 Research Questions 7

1.7 Hypothesis 7

1.8 Scope 7

1.8.1 Geographical scope 7

1.8.2 Content scope . 8

1.8.3 Theoretical Perspectives 8

1.9 Significance of the Study 9

1.10 Methodology 10

1.10.1 Research Design 10

1.10.2 Research Population 10

1.10.3 The size of the respondepts 11

1.10.4 Sampling procedure 12

1.10.5 Research Instrument 12

1.10.6 Data gathering procedures 12

1.10.7 Data analysis 13

1.10.8 Ethical Consideration 13

1.10.9 Limitations of the Study 13

1.11 Literature reviews 14

1.12 Chapterisation 21

1.13 Conclusion 22

CHAPTER TWO:APPLICABILITY OF DUTY OF CONFIDENTIALITY IN TANZANIA 23

2.1 Introduction 23

2.2 Nature of the duty 23

2.3 The Importance of Confidentiality 24

2.4 The Constitution of the United Republic of Tanzania 1977 25

2.5 Bank of Tanzania Act 26

2.6 Procedure of keeping secrecy .27

2.7 The Evidence Act 29

2.7.1 A banker or officer of the a bank in legal proceedings 30

2.7.2 Disclosure of information of customer in Tanzania ........,........................ 30

2.8 The Prevention of Corruption Act 31

2.9 IncomeTaxAct 31

2.10 Proceeds of Crime Act 32

2.11 The Prevention of Terrorism Act 33

2.13 Money laundering in Tanzania 35

2.14 Circular No 8 on Money Laundering control 36

2.15 Anti-Money Laundering Act, 2006 36

2.16 The Penal Code Cape 16 37

2.17 Tanzania Civil Procedure Code 38

2.18 Subpoena for production of evidence 39

2.19 The Freedom of Information Bill, 2006 40

2.20 A Code of Ethics and Conduct for the Public Service in Tanzania 43

2.21 The National ICT Policy 44

2.22 Electronic and Postal Communications 45

2.23 Tanzania Communications Regulatory Authority 46

2.24 The Electronic Communications and Transactions Act 47

2.25 The Role of the Judiciary in Tanzania in electronic evidence 47

2.26 Code of Ethics for Bankers 48

2.27 Tanzanian cases on duty of the confidentiality 49

2.28 Conclusion 53

CHAPTER THREE:NATURE, SCOPE, EXCEPTIONS AND COMPARATIVE

ANALYIS OF THE DUTY OF CONFIDENTIALITY 54

3.1 Introduction 54

3.2 Banker’s Customers’ Relation 54

3.3 Client Confidentiality Principle 55

3.4 Scope and Duration of the Duty of Secrecy 55

3.5 Exceptions to the bank’s duty of confidentiality 56

3.5.1 Where the bank is compelled by law to disclose the information 58

3.5.2 Public interest disclosure 60

3.5.3 Disclosure with a customer’s permission 61

3.6 Liability on discloses information 62

3.7 International Dimensions 62

3.8 Standard Procedure Obtaining Information a cross Borders 63

3.9 Disclosure in International 64

3.10 Relationship between Offshore Financial Centers and Banking Secrecy 65

3.11 Swiss Banking Secrecy Coverage 66

3.12 The United States 68

3.13 Nature of Relationship in Singapore 70

3.14 The bank secrecy In Uganda 72

3.15 Bank Confidentiality under Islamic Law 73

CHAPTER FOUR:PRESENTATION OF FINDINGS, ANALYSIS AND INTERPRETATION ..........., 77

4.1 Introduction 77

4.2 Demographic Characteristics of Respondents 77

4.3 Rating of the level of awareness of the term “Bank Confidentiality” .......... 79

4.4 The level of understanding of the duty of the banker 80

4.5 Rating of the level of the bank service to their customers 81

4.6 Rating the following element relating to the officers 81

4.7 Procedure for monitoring of money laundering in Tanzania 83

4.8 The International law affects Bank Confidentiality in Tanzania 84

4.9 Tanzania pose a unique threat for the banker breach of secrecy 85

4.10 Additional information for the respondents relevant to bank Confidentiality86

4.11 The customers on Bank Confidentiality under electronic banking 87

4.12 A Survey of Twenty (23) Countries 87

4.13 Conclusion 91

CHAPTER FIVE:CONCLUSION AND RECOMMENDATIONS 92

5.1 Introduction 92

5.2 Applicability of the law and policy of the duty of secrecy in Tanzania 92

5.3 Confidentiality on e- banking 93

5.4.1 Establishment of Tanzania Bank Confidentiality Act or Bank Secrecy Act.. 93

5.4.2 The Tanzanian Banking Law must reflect to the International Law 94

5.4.3 Conducive environment for workers (bankers) and customers 94

5.4.4 Code of Ethic must be followed properly 95

5.4.5 Laws of the Banks must be updated periodically 95

5.4.6 The researchers who research on bank must be considered 96

5.4.7 The bank must attentively and professionally study on ICT programs .... 96

5.4.8 The rights and obligations of both the bank and the customer must be Specified under contract 96

5.4.9 The bank must comply with absolute transparency 97

5.4.10 Monitoring and Evaluation procedure 97

5.5 Conclusion 97

BIBLIOGRAPHY 100

Appendix 1: Transmittal Letter 104

Appendix 11: Transmittal Letter for the Respondents 105

Appendix 111: Clearance from Ethics Committee 106

Appendix IV: Informed consent 107

Appendix V: Officer’s of Bank of Tanzania and PBZ, Zanzibar Center 108

Appendix: VI: Customer’s of Bank of Tanzania and PBZ, Zanzibar Center 111

Appendix VII: Proposed Data Presentation 112