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Ezra Suruma Faults Fraudulent Commercial Banks for Turbulence in Sector

Former Minister of Finance Dr. Ezra Suruma speaking on Wednesday during an Economic Forum organized by Makerere University Business School (MUBS)

Senior economist and former Minister of Finance Dr. Ezra Suruma has cited unethical conduct among commercial banks in Uganda as having played a significant role in the turbulence in the banking sector.

Tracing back to the 1980s, viagra sale http://cosmoveda.de/wp-content/plugins/woocommerce/includes/class-wc-tracker.php he said that several banks have collapsed as a result of mismanagement of credit through insider lending, http://ccsa.edu.sv/ccsa/components/com_k2/sef_ext/com_k2.php fraud and speculative borrowing by their own staff.

Dr. Suruma was speaking on Wednesday during an Economic Forum held at Makerere University Business School (MUBS) aimed at discussing the causes, http://costpricesupplements.com.au/wp-content/plugins/jetpack/class.jetpack-autoupdate.php effects and mitigation of turbulence in Uganda’s banking sector.

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“In a sensitive industry such as banking, honesty is very paramount. Banks have refused to admit that there’s a problem of their staff engaging in fraud and insider lending. In this digital age, computers have become an even bigger opportunity to steal money,” Dr. Suruma noted.

While these misdeeds should have been checked by the regulator (Bank of Uganda), Dr. Suruma said the central bank was equally faced with gross ineffectiveness and lack of independence from the government.

He argued that growth in the sector has further been frustrated by the ‘shallow’ coverage of the commercial banks which he said are still concentrated in Kampala and other urban areas.

“The ideal coverage should be one bank at every parish. It’s no wonder that 5 of the leading banks in Uganda combined, command 63% of the market share.”

However, Wilbrod Humphreys Owor the Executive Director Uganda Bankers Association lauded Bank of Uganda whose regulatory role he said has fundamentally changed compared to the past. He said commercial banks are not entirely the problem fiscal related issues such as failure by government to pay its suppliers on time, inefficiency in government and weak local capacity especially in infrastructure projects.

MUBS’ Principal Prof. Waswa Balunywa noted that as the economy continues on a down surge, it will increasingly be hard for the many (26) commercial banks in Uganda effectively keep afloat in the market.

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