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In this month's legal briefing, we cover the requirement for
banks and financial institutions to locate their primary or
secondary data centres in Tanzania. This requirement is detailed in
the Bank of Tanzania (the BoT) circular number FA.56/293/01/54 (the
Circular) issued on 23 August 2019.
In summary the Circular requires that all banks and financial
institutions in Tanzania do the following:
put in place a primary or secondary
data centre
within seven working days from the
date of issuance of the circular re-confirm the location of the
data centres, compliance status and prepare for the centres to be
tested
within 3 months from the date of
issuance of this circular establish a primary data centre
Non-compliance with 1. and 2. above attracts a penalty of TZS 5
billion and TZS 500 million for every month of the recurring
offence.
The circular is to be read together with circular number
FA.56/293/043/VOL.III/28 issued on 3 March 2014, FB.44/475/01/35
issued on 29 February 2016 and FA.56/235/20/29 issued on 10 July
2019. Copies of these circulars can be found on the Bank of
Tanzania website.
Key Definitions
A data centre is a data storage facility where banks and
financial institutions store all their operational data including
client data and information on account transactions / deposits etc.
A primary data centre is the main storage facility while a
secondary data centre is a data recovery site capable of sustaining
operations in case the primary data centre is inaccessible.
Location of primary and secondary data centres
Circular FA.56/293/043/VOL.III/28 required all banks and
financial institutions that had both primary and secondary data
centres outside Tanzania to relocate one of them to Tanzania. This
would enable the BoT to effectively supervise, have access to data
and the opportunity to test the facilities. A one month period was
given to decide and inform the BoT the data centre that was going
to be re-located. A two year period was then given for the actual
re-location.
Circular FB.44/475/01/35 made reference to the above circular
and advised banks and financial institutions intending to establish
secondary data centres in Tanzania to ensure that data replication
did not go beyond 'End of Day' processing and extended the
deadline to relocate from 3 March 2016 to 31 March 2017.
Additionally those intending to relocate were also required to
submit a quarterly progress report.
So far two banks have been penalised for failing to have either
their primary or secondary data centres located in Tanzania.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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