Members of Parliament have expressed interest in independently investigating Bank of Uganda under Governor Emmanuel Tumusiime Mutebile, to among others establish if its inaction played a role in the collapse of Crane Bank Limited, which was in the past ranked the best performing financial institution in the country for five consecutive years.
MPs want to establish “the role played by Bank of Uganda top management in the Crane Bank saga.”
Budadiri West member of parliament Hon Nathan Nandala Mafabi on Thursday tabled on the parliament floor, a motion calling for establishment of a special parliamentary committee to look into Bank of Uganda.
The Central Bank, Mafabi regretted, is highly funded — having been recapitalized to a tune of Shs 1.1trillion in 2015– to properly carry out its mandate of surveilling the financial sector, supervising, regulating, controlling and disciplining financial institutions, which it clearly failed.
Where is this money, and why is the Central Bank underperforming, are some of the questions that Mafabi wants quickly answered.
The collapse of Crane Bank early this year, together with two other banks in the past under the watch of Bank of Uganda, Mafabi says, is an indicator of its incompetence and complicity.
Bank of Uganda weeks ago dragged Crane Bank’s former proprietor Sudhir Ruparelia to court, accusing him of fraudulently extracting money to a tune of Shs 400billion from the bank, and also transferring the bank’s land titles to another company he owns.
While BoU pushes to force Mr Sudhir to return this money, it has continued to be reprimanded in the public realm for failing on its supervisory roles.
Mafabi points out that Crane Bank collapsed overnight, yet it was rated the best performing bank in five straight years.
He also questions the law firm that the Central Bank picked to represent it in the case now before High Court (Masembe, Makubuya, Adriko Karugaba and Sekatawa Advictes – MMAKS), which did represent Crane Bank in various suits in the past an indication of conflict of interest.
This firm should be looked into, Mafabi suggests.
Bank of Uganda over the years, having inspected and given Crane Bank a clean bill of financial soundness, the MPs want these inspection reports reexamined by the special committee and action taken against the issuing officials.
They also want to know whether the Shs 400billion which Bank of Uganda handed out to Crane Bank when its troubles started showing, was recouped.
Mafabi’s motion was seconded MPs Rachel Magyezi (Igara County West) and Michael Kabaziguruka (Nakawa Division).
Deputy Speaker of Parliament Jacob Oulanyah, however, after the motion was tabled, could not allow it to be debated, saying that the same matter is already before the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE)
Bank of Uganda ever since details of its law suit against Sudhir became public at the start of this month, declined to make public comments on the matter which is before court.
Two weeks ago, a concerned citizen and Crane Bank customer named Dennis Nsereko sued Bank of Uganda before High Court’s Civil Division, accusing it of failing to play its supervision role in accordance with Part Viii of the of the Financial Institutions Act.