The taking over of Crane Bank management by Bank of Uganda on Thursday has triggered shocks in the money market and sparked fury from the financial institution’s management.
A high ranking official expressed shock that the Central Bank could take such a ‘radical’ action on grounds of undercapitalisation yet the country is struggling with a liquidity crisis.
“We are in a recession; Bank of Uganda is supposed to facilitate liquidity to strengthen but not destroy the banking sector, viagra buy http://crewftlbr.org/wp-content/plugins/the-events-calendar/src/deprecated/tribe_events_list_template.php ” said an official at Crane Bank who preferred anonymity so as to speak freely.
“We have been fighting with them (Central Bank) for the last 6 months. Their actions are going to collapse this economy because they don’t build investor confidence.”
BoU’s Supervision Director today said Crane Bank capital had “fallen below the 50 percent legal requirement under the law.”
On his part, viagra http://codefor.asia/wp-content/plugins/mailchimp/views/datepicker.php Mutebile said Crane Bank was not only under-capitalised but equally posed “systemic risk to the banking sector.”
He ordered the suspension of Directors of Crane Bank as Central Bank officials marched on the financial institution’s headquarters along Kampala road.
The Central Bank went ahead to say Crane Bank had been put on the watchlist since last September following onsite tests and external audit report.
But the source said every time Crane Bank would get an investor, ambulance http://crossfit908.com/wp-admin/includes/network.php BoU would act in a way that does not encourage confidence.
“We have been looking for potential investors to capitalise the bank and protect customers’ deposits but Bank of Uganda made it difficult for us to succeed,” the angry official added.
During today’s press conference Governor Mutebile admitted that Crane Bank remained Uganda’s third largest bank.
The Crane Bank official said the financial institution had taken the lead in providing loans (NPLs) to local businessmen whose non-performing loans affected the institution.
“Our asset base was far much higher than the liabilities. We just got liquidity issues because of NPLs,” the official added.
Our source also queried the credibility and competence of BoU managers, wondering: “Have those people ever run a bank anywhere? What are their skills? Sitting at Bank of Uganda does not give you ability to run a commercial bank.”
Mutebile has since appointed Statutory Manager Edward Katimbo Mugwanya to act as Managing Director.
It remains unclear if BoU will get another investor or hand over the bank to another financial institution in Uganda.