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BoU officials ‘clash’ over Crane Bank closure

Bank of Uganda trio, Ms Bagyenda, Mr Benedict Ssekabira and Mr Katimbo Mugwanya, that managed the closure of Crane Bank, has failed to give a comprehensive report detailing the undercapitalisation of the defunct Crane Bank (FILE PHOTO)

KAMPALA – Bank of Uganda officials led by the former executive director for commercial banks supervision Justine Bagyenda have failed to explain how Crane Bank was under-capitalised when a decision was taken to close it.

Ms Bagyenda, Mr Benedict Ssekabira and Mr Katimbo Mugwanya – the trio that managed the closure of Crane Bank failed to give a comprehensive report to MPs detailing how the bank was under-capitalised.

The three officials failed to answer questions as MPs moved into the controversial sale of Crane Bank to dfcu Bank in January 2017.

The MPs’ inquiry is also focusing on the mismanagement of closed banks by BoU after the Auditor General Mr John Muwanga issued a stinging criticism of the central bank in a special audit that cited massive flaws in the closure of Teefe Bank (1993), International Credit Bank Ltd (1998), Greenland Bank (1999), The Co-operative Bank (1999), National Bank of Commerce (2012), Global Trust Bank (2014) and the sale of Crane Bank Ltd (CBL) to dfcu (2016).

All the former directors of the above-closed banks will also be cross-examined by the committee.

Some of the Bank of Uganda officials including the former executive director for Supervision Ms Justine Bagyenda, a key figure in the central bank’s drastic closure and handover of Crane Bank to dfcu Bank in 2017, have had a torrid time before the committee.

So far, Ms Bagyenda and Mr Benedict Ssekabira, the director of Financial Markets Development Coordination, have been carpeted after they failed to present evidence of reports on how the value of assets of three closed commercial banks assessed so far, was reduced from Shs117b to Shs98b after the Central Bank took over the liquidation.

In the aftermath of the inquiry, a leaked document has placed deputy governor, Dr. Louis Kasekende at the centre of negotiations to sell the bank before the closure of the bank.

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