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Finance

ICB former owners want License reinstated

Former MD of defunct International Credit Bank, Patrick Katto takes on COSASE affirming that he wants bank licence reinstated after it was ‘ridiculously’ taken over by the Central Bank (PHOTO BY Vincent Kassozi)

KAMPALA – The former shareholders of the International Credit Bank, led by their former Managing Director, Patrick Katto has called on Bank of Uganda to reinstate their license, saying the manner in which the Central Bank took over their institution was ridiculous.

Katto made the request today while appearing before the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE) to present their views following the closure of the bank, by Bank of Uganda which accused the ICB managers of running the Bank to insolvency and leaving it to poor liquidity levels.

The former ICB Managing Director told the Committee that although they concurred with grounds cited by Central Bank leading to the closure of their bank, he said the decision taken by the Central Bank was drastic as the officials of ICB had put in place mechanisms to remedy the problem.

He acknowledges that ICB suffered from a number of bad loans that had been extended to farmers in Kasese who made losses due to bad weather, which saw most of them lose their merchandise and therefore defaulted on their loan repayments agreements.

Katto said: “ICB had not severely impaired its capital requirements, had not exposed the banking industry to systematic failure, did not hold very risky assets, did not indulge itself in much risk-taking behaviour in order to maintain their profits.”

He also questioned the dubious handling of the bank’s loan portfolio after the audit report noted that Bank of Uganda lumped together loan portfolios to a tune of Shs135Bn of Greenland and Cooperative Bank and ICB and sold them to Nile Acquisition at merely Shs8Bn, saying there is need for an investigation into such a decision.

He also raised suspicion about the Shs2.7bn that the Central Bank claimed to have spent on the liquidation of ICB, saying there is need for Bank of Uganda to provide a detailed breakdown on how the said money was spent.

Katto said: “The manner in which we were closed was not only hawkish but ridiculous. BOU officials acted with impunity whose actions should not go unpunished. Their actions caused death, loss of revenue to government, loss of employment and bad character repute to the shareholders.”

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