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MPs pin BoU on unregulated mobile money transactions
What you need to know:
- Problem. The Central Bank says they lack regulations to deal with mobile money platforms in the country.
Kampala.
Bank of Uganda (BoU) has been put on the defensive by Members of Parliament (MPs) sitting on the Committee on ICT over mobile money loans with hefty interests and failure to regulate the industry. This brings a new twist to the cutthroat competition between traditional and mobile banking, with the law makers taking a swipe at the Central Bank for what they said was their reluctance to reign in on telecom companies levying up to 50 per cent interest on ‘loans.’
Mr Cuthbert Abigaba (NRM, Kibaale County) said the mobile telecom companies have been charging him more than 50 per cent interests in 15 days.
Committee chairperson Annet Nyakecho (NRM, Tororo North) asked BoU executive director – supervision Justine Bagyenda to swiftly prepare a comprehensive response to the Committee on the steps the central bank will employ to regulate the sector.
Ms Bagyenda, who the MPs later asked to leave and appear with a comprehensive statement, admitted that there is a ‘lacuna’ in regulating the flourishing mobile money industry.
“We don’t have regulation and we admit there is a lacuna. We need to have the national payments law to give BoU powers to regulate mobile money services,” said Ms Bagyenda.
Committee member Anita Among (IND, Bukedea) tasked the central bank to develop regulatory mechanisms to avert possibilities of using the system for money laundering.
“Having in mind that there is a lot of money laundering, do you put an interest to find out how much money comes into the country (through mobile banking),” said Ms Among.
“It is better for you to come up with solutions going forward,” she added.
The Committee hit a deadlock after MPs could not take in further explanations from Ms Bagyenda.
“That’s why in my submission I said there is a lacuna, we are going to have a national payments law to cure this one, that is why I said a no objection, I didn’t say regulation because we don’t have that,” said Ms Bagyenda.
They are set to return to the Committee on a yet to be communicated date for further submissions.
