Two Years Later; Government Yet To Punish BoU Officials Over Irregular Closure of Seven Commercial Banks

The government of Uganda has not yet taken punitive action against Bank of Uganda (BoU) officials for the closure of seven commercial banks two years after the recommendation was made by Parliament.

In 2019, Parliament’s Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) recommended that senior BoU officials be individually held responsible for the irregular closure of seven commercial banks.

The banks were Cooperative Bank, Teefe Bank, Greenland Bank, Uganda Bank of Commence, Crane Bank Limited, International Credit Bank Ltd, and Global Trust Bank.

Cosase had confirmed irregularities in the dissolution of banks, exposed mismanagement at the Central Bank and proposed key reforms while providing wholesale recommendations against BoU officials guilty of the prevailing mistakes.

The Cosase report further recommended that some shareholders be compensated for the losses. It also recommended that BoU officials (without naming them) who committed the mistakes, be held personally responsible for the mess involving the closure of the banks.

However, two years down the road, no action has been taken against the BoU officials.

Munira Ali, the spokesperson of the Inspectorate of Government (IG), said the agency is not investigating any case in relation to the Parliament’s recommendations on the closure of commercial banks.

“We have not carried out any investigations about that. We have not done anything because that would have been Parliament to forward to us but they did not,” Munira said.

However, the spokesperson of the police’s Directorate of Criminal Investigations (CID), Charles Twine, said that they have been investigating some BoU officials, but declined to reveal the particulars of the officials under probe.

“What I can tell you is that we are still investigating. It does not matter telling you how many people we are investigating and how many have been dropped,” Twine told Daily Monitor a few days ago.

At the time Parliament debated the report, the Prime Minister, Dr Ruhakana Rugunda, said the government would take serious action on the several inconsistencies in BoU’s closure of commercial banks.

“When banks like Cooperative Bank closed, the local people got a raw deal because they found it easier to deal with it as it was locally founded. We agree for example, that there should be the separation of central bank supervision and liquidation into two departments to curb the inconsistencies that have arisen,” Dr Rugunda said in a statement to Parliament. He also noted that there was no need for the central bank to hire private law firms, MMAKS and Kirkland Advocates, to oversee the takeover and closure of the institutions.

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