The impact of public institutions and government agencies banking with the bank of Tanzania (BOT) on the performance of commercial banks in Tanzania: the case of selected commercial Banks.

The study focused on the impact on public institutions and government agencies banking with the Bank of Tanzania (BOT) on the performance of commercial banks in Tanzania. The study was performed in five selected commercial banks which were the National Microfinance Bank (NMB), Akiba Commercial Bank (ACB), National Bank of Commerce (NBC), Dar es Salaam Commercial Bank (DCB) and CRDB Bank. The main objective of the study was to assess the impact of public institutions and government agencies banking with the central bank on the performance of the commercial banks in Tanzania. It was guided by three predictors as hypotheses which were low liquidity, non-performing loans and low credit lending on vital sectors in the economy as concerns affecting the performance of the commercial banks in Tanzania prior to the directives. Positivism was the main study methodology supported by explanatory design through causality testing. Data were gathered using the questionnaire from the selected study cases as five respective commercial banks; and being computed in the SPSS program version 23.0 to generate analytical tools. Descriptive statistics were first performed to show the overview of the banking sector and the employees. Moreover, correlation and multiple regression analyses were performed to show the existing relationship between study variables; with results indicating that the three independent variables were all positive and statistically significant on the dependent variable. The implication of the findings is that commercial banks performance through the withdrawal of government deposits and bank in the central bank is negatively affected by low liquidity, non-performing loans persistence and low credit lending on vital sectors in the economy. The study further recommends that commercial banks must conform to the practice which is genuine and carter for fair competition in the market to ensure their long term survival and well-being in the market and not being interfered with serious government decisions and directives. Despite that it is also suggested that the study was conducted using explanatory design whereas another inquiry may be undertaken using exploratory design.