KAMPALA – Government 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.
Parliament’s committee on Commissions, Statutory Authorities and State Enterprises (Cosase) in March 2019 recommended that senior BoU officials be individually held responsible for the closure of Crane Bank Limited, Cooperative Bank, Teefe Bank, Greenland Bank, Uganda Bank of Commence, 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 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.
Ms Munira Ali, the spokesperson of the Inspectorate of Government (IG), is quoted by Daily Monitor as saying that they have not investigated any BoU officials because Parliament did not forward the report to them.
“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,” Ms Munira is quoted by Daily Monitor as saying.
This has raised concern over government’s failure to implement recommendations arising out of different investigations.
At the time Parliament debated the report, the Prime Minister, Dr Ruhakana Rugunda, said 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 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.
“It was an unnecessary and costly venture, especially since BoU has a well-qualified legal team which is competent to handle such issues,” Dr Rugunda said. Meanwhile, BoU is again in the spotlight after a Presidential Tripartite Committee unearthed more inconsistencies in the management of the central bank.