MPs draft motion to probe BoU over bank closures


Parliament is set to consider a motion by a group of MPs seeking to set up a select committee to investigate the operations of Bank of Uganda with a particular interest in the circumstances that led to the closure of National Bank of Commerce and Crane Bank.

Crane Bank was closed by BoU in October 2016 on grounds that it was “significantly an under capitalised institution” and posed a “systemic risk to the stability of the financial system” in the country while NBC was closed in 2012 after the central bank concluded that the “continuation of NBC’s activities were detrimental to the interests of its depositors.”

Questions over the closures of banks started emerging after Bank of Uganda Governor Emmanuel Tumusiime-Mutebile was caught up in an internal struggle with the director of commercial banks supervision Justine Bagyenda.

The governor then sacked Bagyenda in a controversial October 7 reshuffle.

Budadiri West MP Nandala Mafabi, the mover of the motion, says the proposed committee will investigate reports of collusion between Bagyenda and commercial banks when she served as director supervision, money laundering at the central bank in contravention of The Anti-Money Laundering Act and abuse of The Whistle Blowers Act.

Mafabi also wants the Select Committee to separately investigate Ms Bagyenda over reports of tax evasion.

Parliament resumes next week Tuesday and the motion to set up a select committee to investigate BoU has been on the Order Paper.