BOU probe: COSASE wants Bank of Uganda officials punished

The much awaited Parliamentary probe report on the closure of seven commercial banks by Bank of Uganda (BOU) has been tabled before Parliament with the committee on Commissions, Statutory Authorities and State Enterprises (COSASE) recommending that all officials of the central bank who failed to properly execute their duties in accordance to the law be held responsible.

Outgoing committee chairman Abdu Katuntu read the 65-page report which was signed by 28 out of the 36 committee members.

The report specifically mentions Ben Ssekabira, then director Commercial Banking at BOUwho was the agent of the liquidator/ receiver of the three defunct banks – International Credit Bank, Greenland Bank and Co-operative Bank plus Justine Bagyenda, the former Executive Director for banks supervision at BOU.

The report recommends that BOU should address the probable financial loss occasioned to the commercial banks since it failed to value the assets and liabilities of the banks notably Global Trust Bank, National Bank of Commerce and Crane Bank, considering the lapse of time and impossibility in revaluation of assets.

“BOU did not keep the asset movement ledgers and all records relating to the liquidation of the three financial institutions in distress i.e. ICB, Greenland and Co-operative Banks (whose liquidation started under the Financial Institutions Statute and continued under the FIA, 2004). This offended the provisions of section 106 (1) of the [Financial Institutions Act] FIA, 2004,” Katuntu told Parliament.

With respect to Crane Bank, Katuntu said that BOU lacked financial ledgers contrary to Section 106 (1) of the FIA, BOU failed in its statutory duty under section 106 (l) of the FIA to prescribe the manner in which liquidators should prepare and keep proper financial ledgers and financial records during resolution period.

The committee thus urged government to consider amending the Financial Institutions Act to provide a time limit within which liquidation of financial institutions in distress should be concluded.