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COSASE summons owners of closed banks

In twist of events, COSASE has summoned owners, shareholders of the closed banks such as GLobal Trust Bank, Teffe bank, among others (FILE PHOTO)

PARLIAMENT – The Chairperson of the Committee of Commissions, Statutory Authorities and State Enterprises (COSASE), Abdu Katuntu has revealed that the shareholders of all the seven defunct Banks have been summoned by Parliament to explain circumstances that led to the closure of their financial institutions.

Katuntu made the revelation on Friday while interfacing with officials of Bank of Uganda as the Committee comes into its final days of probing the Central Bank on the procedures they used to close down all these Banks.

“We have invited all former directors of the Defunct Banks. The Shareholders of Global Trust Bank sent me an email that they are re flying in from Nigeria and we are going to ask the same questions,” he said.

In a period of 23years, the Central Bank has overseen the closure of seven defunct Banks including; Teffe Trust Bank (1993) that was closed due to insolvency, International Credit Bank Ltd (1998) due to poor liquidity and insolvency, Greenland Bank (1999) insolvency and violation of Financial Institutions Statute.

The other Banks were; Cooperative Bank (1999) continued poor performance and non-compliance

with regulatory capital adequacy requirements, National Bank of Commerce (2012) undercapitalisation, Global Trust Bank (2014) undercapitalization and corporate governance weaknesses, and Crane Bank Ltd (2016) closed because it was undercapitalised.

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