PBZ celebrates Revolution with new banking system

PROBLEMS that hinder the performance of banks in the provision of better services to customers are the challenges which need immediate solutions. 

However, as Tanzanians mark the 55th anniversary of the Zanzibar Revolution, the People’s Bank of Zanzibar (PBZ) has decided to end these problems by introducing Core Banking System (CBS). 

Juma Amour Hafidh, Managing Director of PBZ, says the new system known as the BANKS installed by the ICFS company of Japan at a cost of USD 1.9 million will improve the services. He says the advantages of CBS, when well implemented, ensures accurate and error-free delivery of financial services to customers, thus adding to the bank’s efficiency and performance. 

He says that the system is set of basic software components that manage the services provided by a bank to its customers through its branches (branch network). The bank’s customers can make their transactions (deposits and withdrawals) from any agency on the ATM /RCMP at their disposal. 

Transparency of financial institutions, anti-financial crime (eg money laundering), multi-channel (internet, phone), multi- currency and multiple languages, are some of the advantages of CBS system. 

The PBZ is a product of the Zanzibar Revolution established in 1966 to provide services to the government and the people. 

Until 2006 the bank was operating with Manual Banking System, and then due to growing Information Communication Technology (ICT) it started undergoing reforms. 

Bankers Realm system had to be replaced to pave way for better improved services including VISA and MasterCard services to the convenience of customers. “Our plans to improve the bank system started in 2015 driven by pressure from customers who were complaining of poor services at branches,” Hafidh says. 

Nowadays most banks use core banking applications to support their operations where ‘CORE’ stands for “Centralized Online Real-time Environment.” This basically means that the entire bank’s branches access applications from centralized data centres. 

“As we celebrate 55th anniversary of the Revolution, we are doing the same for our bank’s success. Despite some challenges some years ago, many people have benefited from our services,” he adds. 

PBZ was established as a retail bank serving individuals, small and medium enterprises (SMEs), and large corporate clients. Initially, its service area was limited to the islands of Zanzibar but in April 2011 it opened a branch in Dar es Salaam and Mtwara. Plans are underway to open new branches in Mwanza, Arusha, and Mbeya. 

PBZ has also launched an Islamic bank window in addition to the conventional banking services that it offers. 

In 2007, the bank conducted a survey and found out that many citizens avoid putting their money in banks due to their religious beliefs that prohibit interests. 

Islamic Banking products are mainly divided into deposit mobilization contracts such as Al Mudharaba (Saving and Time Deposits) and fund utilization products, such as Bai Muajjal (Sale on Differed Payments) and Murabaha (Sale on Cost Plus Mark Up). 

Under financing products, the Islamic also offers other products such as Bai Salam (Financing of Agricultural Products) and Bai Al Istinai (Financing of Manufactured Goods), and IKHLAS - Mortgage Financing, Lease (Ijarah Financing), and Shariah (Compliant Education Financing). 

“We have been doing well and so far we have given out more than 332.6bn/- loans,“ says the managing director. 

Despite technological advances such as online, mobile banking, and Automated Transaction Machines (ATMs), customers are still complaining of endless queues. 

“Improving electronic CB to handle as many customers as possible is our current goal, Hafidh explains. He says all payments to the government are now made through PBZ which has increased customers. 

In recent years, he says the bank’s transaction services had grown significantly. 

Some ministers have said that the PBZ has been doing well but needs to improve its service cover farmers. 

“You need to keep your money in any bank of your choice. It is safe and having an account will enable you to access loans if you need them,” one minister said. 

A farmer, Mussa Kombo, says that he recently closed his account in one of the banks because of inconveniences whenever he wanted his money. 

“Queues and frequent breakdown of ATMs have prompted me to close my account and keep the money at home,” he says. President Ali Mohamed Shein has also hailed the Bank for the progress, urging workers to continue working hard. 

Researchers say that the future of banking is changing. With high interest rates, low fees and a propensity for digital technology, online banks are successfully competing with traditional banks, forcing many banks to go mobile. 

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