• Home
  • Uganda: Mbabazi, Rukikaire pin Bagyenda on NBC closure

Uganda: Mbabazi, Rukikaire pin Bagyenda on NBC closure

Parliament- Former shareholders of the National Bank of Commerce (NBC) yesterday said Ms Justine Bagyenda, former Bank of Uganda (BoU) executive director for commercial banks supervision, closed their bank even after they had raised the Shs7b the central bank had set as the requirement for capitalisation.

Mr Mathew Rukikaire, the chairman of Board of Directors of the NBC shareholders, told a Parliamentary Inquiry yesterday that when NBC raised the Shs7b, Ms Bagyenda instead demanded that the money be invested in treasury bills.

“BoU continued claiming that the capital of the bank was being eroded yet this was caused by BoU itself. This was made worse when NBC was slapped with illegal civil penalties of Shs2m per day by Ms Bagyenda. It is very clear to us that senior staff at BoU were determined to fail BoU,” Mr Rukikaire said.

By December last year, Mr Rukikaire said former shareholders of NBC suffered losses worth Shs295b and want compensation.

The former shareholders tabled a 2012 BoU monitoring report which indicated that NBC’s assets were worth Shs21b, above the then minimum capital threshold of Shs10b, but the central bank closed the bank.

According to Section 47 of the Financial Institutions Act, an undercapitalised financial institution is one which holds less than 50 per cent of the minimum capital required.

Mr Rukikaire said BoU should have required NBC directors to provide a capital restoration plan within 90-180 days as required by the FIA Act.

He added that the former shareholders still do not know the whereabouts of the closed bank’s new ATMs worth $240,000, furniture ($700,000), safes ($150,000) and vaults ($80,000).

The former shareholders petitioned the Constitutional Court challenging the closure but the case is not yet disposed of.

Former Prime Minister Amama Mbabazi, who is also a former major shareholder in NBC, said Ms Bagyenda acted illegally to close the bank but declined to answer whether he suspects the closure was politically motivated.

BoU closed NBC in September 2012, at a time when Mr Mbabazi was said to be preparing to challenge President Museveni for the presidency.

Businessman Amos Nzeyi, also a former major shareholder, narrated how he secured a Shs7b loan from the then Imperial Bank (now Exim Bank) but was confronted by Ms Bagyenda demanding the source of the money.

By Daily Monitor

Related posts

Kenyan leaders mourn Morgan Tsvangirai


Man Shot Dead After Stabbing Guard at US Embassy in Kenya


Fort Portal teachers strike over salary arrears


This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More