Traditiona banking as opposed to modern banking

  • Category: Finance
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  • Published: 04.16.20
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I actually am very happy to convey my sincere acknowledgements to all the individuals who contributed to the completing this study. Above all, I thank almighty God who have always supplies me with proper into the strength which has offered much towards the completion of my study. Subsequent is my project supervisor, who spent his period, knowledge and skills in guiding me towards effective understanding and completion of the study. To me it is a real learning experience. Azania Bank representatives who cooperated very well with, by providing any information I needed pertaining to my examine.

My ardent gratitude to my mother for supplying me financial support and material support which without this research could not have already been complete. Office of Financial and Finance, fellow college students and friends for their motivation and offering me with conducive learning environment.

EXEC SUMMARY The Institute of Finance Management(IFM) require the students to enhance the theoretical learning skills acquired in the class into functional as in line with the syllabus and lastly to prepare the project report.

My spouse and i conducted the project work at Kenya Business Bank. The objective of this report is to analyze the monetary statements, all their uses and mathematical expression from the transactions, in particular “balance sheet” of Azania Bank Limited, and all proportions that can be computed and reviewed from the linen. Also the reports looks at electronic bank, its scope, benefits to customers and banks, issues of electronic digital banking to banks, how exactly does the central bank reduce risks connected with electronic banking and the circumstance of electronic digital banking in Azania Financial institution and Tanzania in general. As BBF student I did task management career practically and acquired various abilities, challenges and problems that boosted my realizing that will guideline me to the successful long term at the commence and the contemporary society at large. The business should take into mind challenges and recommendations in order to achieve their goals.

DEDICATION This function is committed to my father who also passed away at a very crucial moment, I am hoping he had for least existed to read yet just as they will say¦ ‘There is never an appropriate time to claim goodbye’. Save a place in heaven to another time we meet



A brief history of Tanzania banking market is split up into two eras which are pre-colonial era and post-colonial era. The pre-colonial era schedules the nineties dominated by simply German impérialiste era and British requirement era which in turn dates post world warfare one period following the beat of A language like german and confiscation of it is colonies and distributed to the victorious power particularly Britain and Italy. The A language like german started various banks which in turn meant to facilitate colonial activities which include concern of their money, saving impérialiste officials deposits and providing loans to settlers. Industrial banking was introduced in the country in 1905, when the Deutsch-Ostafrikanische Bank (German East Africa Bank) opened its business office in Dar es Salaam.

In 1911 another German banks namely Handel traditional bank fuer Ostafrika opened a branch in Tanga (see bot 2013). At the time of freedom branches of foreign industrial bank including Standard Bank of South Africa, National Grind lays Bank and Barclays Bank D. C. O. completely outclassed the banking system. Other smaller financial institutions that were in operation in the country included Ottoman Bank(1958), Bank of India(1953), Financial institution of Baroda(1953), Commercial Traditional bank of Africa(1961) and Nationwide Bank of Pakistan(1962) (See Bank of Tanzania, 1996). Since then the Tanzania bank industry continues to be improving to provide when the industry has authorized more than 31 banks, and being the stable loan company in the country.


The word Net defines traditional bank as financial institutions that accepts deposits and channels the amount of money into loaning activities. The Webster’s Modified Dictionary (1913) defines a bank while original ”bench”, ”table”, ”counter” of Indonesia origin top marks kin to English ”bench” an established pertaining to the custody, loan, exchange or concern of money and then for facilitating the transmission of funds by drafts or bills of exchange


This can be a system which usually more than one first deposit is supported by the same amount of cash in the banks vault. In traditional banking banks had been apparentlybankrupt because if any day all the depositors could get their deposits the financial institutions would be left penniless. Nevertheless modern bank applies fragmentary; sectional banking by simply working hand in hand with the government by creating monetary plans which adjusts money source and defends banks in the bankruptcy risk. 2 . FIRST DEPOSIT ATTRACTING

The deposit getting is the main objective for any loan company nowadays. The deposits traditionally are the key source of funds for banking companies. In past banks were used by visitors to save money or security and convenient means. However while economy developed the transact become more worldwide banks started to attract money from underneath pillow with their accounts. Inside the traditional banking there was simply no interest to help keep valuables with banks however in the modern bank banks shell out interest and compete intended for funds throughout the economy.


The fraudulent procedures of the pre-modern period raised the issue generally known as asymmetric information concept. Consist of saying the existence of banks is because of the existence of asymmetric information in financial markets. Banks came into their own when information inefficiencies are readily available in particular, when information is asymmetrically organised by the two parties to a financial transaction Hence contemporary banks include mitigated the asymmetrical info problem through the use of economies of scale which can make the physical exercise less costly and effective.


The banks are financial institutions established by govt to regulate a lot of issues in the economy. As an example the Bank of Amsterdam was established in order to regulate payment system and coin minting, The Bank of Venice began to financing war and The Bank of England began as a non-public entity In modern banking central banks control and regulates national economic operations


The past quarter of last 100 years evidenced fresh innovations in delivering the banking services to the customers. These innovative developments are Automated Teller Devices (ATM) created in order to reduce personal price and overcomeregulatory obstacles, Credit and Charge card produced to ease repayments and reduce examine processing costs, phone financial developed to boost competitive capability. In the classic banking all of the above features are not there to appear and utilized by people. REALIZATION

The difference between modern and traditional banking demonstrates the evolution of banking through the history, we could conclude by saying financial institutions has developed automatically, ancient bank practices weren’t more than distinct operations taken on by each person and mainly not at the same time. The modern banking is the rational consequence of evolution from the medieval financial developed and shaped beneath the regulations certain to the country.


Azania Bank Limited is the first indigenous exclusive bank, earlier known as known as 1st Adili Bancorp Limited founded in 95 following the liberalization of the banking sector. It had been established by Tanzania citizens as well as national pension plan funds and International Loan company including The East African Development Bank, The Swedish Worldwide Development Agency and a north american Merchant Lender, Gerald Metals Inc. AZANIA BANK EYE-SIGHT AND OBJECTIVE STATEMENT


”To be considered a One Quit Financial Center”


”Committed to availing flexibility of usage of a range of quality financial services to our clients using competent and devoted staff making use of appropriate technology” AZANIA LENDER OWNERSHIP FRAMEWORK

The major investors of the Bank include Countrywide Social Security Fund (NSSF) 34. 8%, Parastatal Retirement benefits Fund (PPF) 30. 1%, Public Services Pensions Account (PSPF) 17. 2%, Private sector organisations Pensions Finance (LAPF) 18. 2%, East African Advancement Bank (EADB) 2 . 3% and several native Minority Investors including staff holding 1 . 4% from the shares. A TABLE DISPLAYING AZANIA TRADITIONAL BANK OWNERSHIP AND PERCENTAGES OF SHARES OWNERS/COMPANY’S NAME


Nationwide Social Secureness Fund(NSSF)

34. 8%

Parastatal Pension Fund(PPF)

40. 1%

Public Service Pension Fund(PSPF)

17. 2%

Local Authorities Pensions Fund(LAPF)

14. 2%

East African Creation Bank(EADB)

2 . 3%

Group Shareholders

1 . 4%


The supervision of the Financial institution is within the Managing Director who is supported by Eight (8) functional Directorates namely Fund, Banking Procedures, Credit, I . t, Internal Audit, Legal Companies, MD’s Business office and Recruiting & Government, each advancing by a functional Director. The functional directors are assisted by managers. The branches are managed by Part Managers revealing to Representative of Bank Operations. Current staff supplement stands by 250 personnel whereby 114 are females and 136 are guys as of September 2013.


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