BoU Officials Grilled Over Shs478b Spent On Crane Bank Limited Takeover

BoU Officials Grilled Over Shs478b Spent On Crane Bank Limited Takeover an accessible web community

By Our Reporter

MPs on Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) that is conducting an inquiry into the conduct of Bank of Uganda and it’s officials in the closure of seven banks have tasked the Central Bank officials to explain why they used Shs 478billion to close Crane Bank which needed only Shs 157 billion for capitalisation.

The committee has been probing BoU for almost a month over the closure and sale of seven commercial banks. The MPs on the committee using the Auditor General’s report revealed irregularities in the sale of the banks CBL, Global Trust Bank, Greenland Bank, International Credit Bank, Cooperative Bank, National Bank of Commerce and Teefe Trust Bank.

Yesterday BoU officials were not on the same page when asked how undercapitalised Crane Bank was before they took a decision to shut it down. Governor Tumusiime Mutebile admitted he didn’t have the right figure while Ben Ssekabira, the Director Financial Markets Coordination, said it was Shs157 billion .

Ms Justine Bagyenda the former Executive Director Bank supervision said CBL needed an additional capital of at least Shs32 billion by September 15, 2016 and progressive capital of Shs56 billion if capital adequacy was to be restored by October 31, 2017.

On Wednesday morning when asked again by Cosase Chairman Abdu Katuntu how much the bank needed for capitalisation before its closure, Sekabira maintained that the money needed was Shs157 billion.

Katikamu South MP Eng. Abraham Byandala wondered why there was a rush to take over Crane Bank since it had been given up to end of October 2016 to recapitalize.

“A bank can even be recapitalised within a day but it was taken over 10 days before the time it was given,” he said.

MP Medard Ssegona asked for documentary evidence before Odonga Otto questioned why Shs478 billion was spent on a bank that needed only Shs157 billion at the time of closure.

“If Crane Bank was in deficit of Shs157 billion, why did you use Shs478 billion to clear mess? Why didn’t BoU just capitalise Crane Bank with Shs157 billion,” MP Odonga Otto asked.

BoU spent Shs466. 6 billion during the takeover as liquidation support to CBL to keep it running while Shs12.2 billion was cost to service providers, making a total of Shs478.8 billion which came from taxpayers’ purse. an accessible web community

Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: