By Our Reporter
Kampala:Business is not rosy at all with Dfcu Bank and if things don’t improve for them soon then they may end up wound by the Bank of Uganda.
This because a recent report from BoU auditors for the Financial Year 2018/2019 indicates that Dfcu was under capitalised as of June 30, 2019.
The BoU report states that “As per the Bank of Uganda Capital Section 14(3), the issued and paid up capital of the Bank shall be a minimum of Shs20,000m.
As at June 30, 2019, the Bank’s core capital was below the minimum require capital by Shs671,712 million (2018: 482,730 million).
“The statement adds that “The operating losses of the Bank during the year ended June 30, was highly attributable interest expense paid to financial institutions on deposit auctions and vertical repos issues by the Bank in Management of monetary policy as per the Bank’s currency costs of Shs198,274 (89% of interesting income). 2018:1550,000million,(79%) of interest income.
The costs of implementation of monetary policy which have caused erosion of the Bank’s core capital are fully borne by the Bank.
About Leaving Tycoon Sudhir Ruparelia’s Properties
Although Dfcu bank came out a few days back and refuted allegations of their intentions to shift from properties that were inherited from Crane bank, the new BoU report indicates that Dfcu expressed their interest of leaving the 48 properties.
The BoU auditors’ also states “Following the court ruling,Dfcu limited expressed its interest to BoU of its decision to exercise its option to rescind the purchasing of the 48 properties in pursuant to 8.7 of the purchase of assets and assumption of liabilities agreement.”
The Court Ruling alluded to in the statement is the one made by the High Court Commercial Division a few months back to the effect that Dfcu’s occupation of 48 properties that used to be leased from Meera Investments by Crane Bank was illegal, null and void.
The same court also ruled that it was illegal for Dfcu bank to change the titles of ownership from the names of Meera Investments into the Bank’s names.
It now appears that although Dfcu bank purports to be enjoying a big market share of Uganda’s banking sector, things are actually not good at all.
It should be noted that one the reasons why BoU wound up and sold Crane Bank in 2016 was because it was under capitalised, which is the same problem Dfcu is facing now.
