NBC demands for Shs 295 billion compensation

The directors of the defunct National Bank of Commerce  (NBC) have asked Parliament to direct Bank of Uganda  (BOU) to compensate them for the losses they have suffered since the closure of their bank in September 2012.

The directors led by former Prime Minister Amama Mbabazi, former minister Mathew Rukikaire and businessman Amos Nzeyi appeared before Parliament’s committee on Commissions, Statutory Authorities and State Enterprises  (COSASE) that is probing BOU’s closure of seven commercial banks.

Rukikaire told the committee chaired by Bugweri MP Abdu Katuntu that at the time of its closure, NCB employed over 300 Ugandans, supported many businesses operated by both women and youth groups and also contributed more than 10 billion shillings in direct taxes between 2000 and 2002.

Before it was closed, Rukikaire said, BOU told them that they needed to raise Shs 7 billion within seven days to keep the bank running.

While they were able to mobilise the money within four days, BOU went ahead and sold their bank to Crane Bank.

He further told the committee that BOU forcefully took cash and NBC assets from its premises with many bank documents being thrown around.

“In a public notice issued by Dr. Louis Kasekende, it was claimed that the take over, winding up and immediate sale of NBC to Crane Bank was done to protect the interest of depositors and maintain the stability of the financial sector. This was far from the truth,” Rukikaire said.

The sale which Amama Mbabazi was done in heist was conducted without a cash or asset inventory being performed as required by the Financial institutions Act (2004).

“NBC cash and assets where far more than the deposits and loans. As shareholders, we would like to know what Bank of Uganda is doing with the rest of the money.To date, we don’t know where NBC assets including brand new ATMs worth $240,000, furniture worth $700,000 etc are,” Rukikaire said.

They further told the committee that six years since their bank’s closure, its vehicles are still parked at BOU.

“National Bank of Commerce suffered a serious set back when Bank of Uganda summarily and illegally closed it on September 27, 2012, the manner in which it was closed was in total violation of the law, it was neither transparent nor fair,” Rukikaire said.

Mbabazi, recalling how the former BOU executive director in charge of Banks supervision Justine Bagyenda acted at the time of the closure and sale of NBC wondered where she got the powers with which she was acting.

Some MPs like Peter Mugema (Iganga Municipality) with sarcasm wondered how a powerful Bagyenda could close a bank owned by an equally powerful Prime Minister at the time.

In response, Mbabazi said, “I act in accordance with the law, she was acting against the law.”