Kampala, Uganda | THE INDEPENDENT | The Governor of Uganda’s Central Bank Emmanuel Tumusiime Mutebile has insisted that he was right to close seven commercial banks between 1993 and 2017.
Mutebile made the remarks on Thursday as he gave his closing remarks on the ongoing probe by parliament’s Committee on Commission’s Statutory Authorities and State Enterprises that is investigating circumstances of closure and sale of the defunct commercial banks. The investigation stems from a 2017 forensic Audit Report by the Auditor General on the closure of commercial banks.
The report highlights irregular operations at the Central Bank and the controversial closure and sale of commercial banks since 1993. The banks include Teefe Bank, International Credit Bank Ltd, Greenland Bank, The Co-operative Bank, National Bank of Commerce, Global Trust Bank, and Crane Bank Ltd.
Mutebile told COSASE chaired by Bugweri County MP Abdu Katuntu, that it was necessary to close the banks because failure to intervene would have led to a financial crisis that would have harmed the financial sector, businesses and economy.
The Bank of Uganda governor also said that the ongoing probe has been a learning process for the Central Bank and that the bank will review some of its practices and policies in order to improve on their capacity to perform their functions.
Mutebile also promised the committee to put in place measures that will boost the confidence of public in the central bank.
COSASE Chairperson Abdu Katuntu thanked the Bank of Uganda officials for collaborating towards the process and hoped that even before his committee report is produced they would be able to put in place measures to improve the bank.
The committee broke off for the Christmas holiday after several weeks interfacing with the Central Bank officials concerning the closure of commercial banks.
In the course of its investigations, the committee investigation has so far exposed gaps in the processes used by the Central Bank to close seven commercial banks including among others absence of inventory reports, evaluation reports, absence of minutes, unaccounted for money, missing land titles, disputed payments to external lawyers and customer loans that were inherited from the closed banks and sold at lower rates without justification.
The committee resumes work in January and it is scheduled to meet directors and shareholders of each of the defunct banks, external lawyers and others.