INCOMPETENCE OR INEFFICIENCY? Bank Of Uganda FAILS to COLLECT Shs59b from SALE of two (2) Banks

By DailyNewsUG Business Correspondence

DailyNewsUG |KAMPALA|Bank of Uganda (BoU) failed to recover a total of Shs59b from different accounts held by the International Credit Bank (ICB) and Global Trust Bank (GTB) when they were closed in 1998 and 2014, respectively.

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Documents before Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) indicate that total assets in an escrow account valued at Shs15b are yet to be recovered by dfcu Bank, which the Central Bank appointed to collect the money.

The Shs15b was in assets that were owned by GTB when BoU revoked its licence in 2014, before selling its assets and liabilities to dfcu Bank.

“This matter refers to the assets in the escrow accounts managed by dfcu Bank, which was appointed to collect it on behalf of BoU. So far, BoU has recovered Shs6.3b and is following up on the collection of the balance,” reads a matrix BoU prepared as its defence to the committee that is investigating the closure of the banks.

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BoU also failed to recover Shs44b from the ICB’s foreign accounts and said in its defence that the “winding-up process is still ongoing.”
BoU governor Emmanuel Tumusiime-Mutebile and his deputy Louis Kasekende will on Friday next week explain to MPs why billions of shillings that was in the accounts of closed banks is yet to be recovered years after their closure.

BoU officials will also explain why assets worth Shs23b, formerly owned by GTB, were not transferred to dfcu in the Purchase and Assumption (P&A) agreements when GTB’s licence was revoked in July 2014.

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The assets included cash balances (Shs6.6b), amounts due from other banking institutions [Shs2.3b], other assets (Shs5.1b), amounts due from group companies (Shs9m), property and equipment (Shs5.6b), intangible assets (Shs758m) and deferred tax (Shs2.4b).

Other wrongdoings at BoU that were uncovered by a forensic investigation by the Auditor General, which the Governor and his team have to explain to MPs, include unaccounted for money; missing land titles; disputed payments to external lawyers; and customer loans that were inherited from closed banks and were sold at an undervalued rate without justification.


Auditors also faulted BoU for selling loans at discounted prices after they discovered that loans for ICB, Greenland Bank and Cooperative Bank, whose total loan portfolio was sold at Shs135b, included secured loans of Shs34.5b.

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