Prime
Bank of Uganda ready to close more Banks
Deputy Governor Bank of Uganda, Dr Louis Kasekende. FILE PHOTO
What you need to know:
- Asked why banks like UCB, Cooperative and Green Land Banks closed, he attributed it to poor governance because of government involvement in paying out money and recruiting workers.
- "With the corruption we are seeing now, you can imagine what would happen if it was government directly paying workers and recovering money, the amount of aggressiveness to recover the money would not be the same as the private sector does," he said.
Bank of Uganda has warned commercial banks that it will continue closing those which fool around with depositors' money as it has already done with some.
While opening the seventh International leadership conference at the Golf Course View hotel in Entebbe on Wednesday, Dr. Louis Kasekende the deputy governor bank of Uganda said the public should stop misjudging the central bank from the number of banks it has closed because it has saved many depositors from losing their money.
"Before we close a bank, we impose constraints on activities of the bank which are threatening depositors' money," he said.
He explained that since 2004, no single depositor has lost money to a bank that has been closed because it is the responsibility of Bank of Uganda to protect their money.
"When we closed NBC bank, all the depositors were able to transact at Crane Bank, when we closed Crane Bank, depositors were able to transact at DFCU and when NC bank had issues in Kenya, we sold it to Exim bank without a single depositor losing a shilling," he said.
When asked why award winning banks like Crane Bank which was highly ranked and expanding very fast in the country were closed, Dr. Kasekende said often before a bank is licenced, they present very good proposals which they fail to operationalise.
"It is very expensive to get a bank on its feet because of the operational costs. Some of these banks are like babies that remain stunted but what is important is to avoid misrepresenting the financials and governance issues," he said while referring to the closed banks.
He said he would love to explain to the public what happened to Crane Bank but he is constrained by the Court Case.
"The day when we win the court case, call me and i will tell you everything that was happening," he said.
The leadership conference is an initiative by Makerere University Business School to bring together government leaders and academia to discuss matters affecting the economy.
Prof. Wasswa Balunywa the principal MUBS said they invited the deputy governor to open the conference because of the role he played in stabilizing Uganda's economy.
"When President Museveni came to power in 1986, he was a communist but Dr. Kasekende was instrumental in making him change to capitalism to allow market forces to operate," he said.
Asked why banks like UCB, Cooperative and Green Land Banks closed, he attributed it to poor governance because of government involvement in paying out money and recruiting workers.
"With the corruption we are seeing now, you can imagine what would happen if it was government directly paying workers and recovering money, the amount of aggressiveness to recover the money would not be the same as the private sector does," he said.
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