Uganda’s Parliamentary committee scrutiny for the defunct banks kick starts

The parliamentary committee on commissions, statutory authorities and state enterprises has today started scrutinizing  the closure of the  defunct banks by questioning the criteria which was used to close Teefe bank.

The committee chaired by bugweri county mp Abdul katuntu quizzed the officials of the central bank headed by the governor Tumusime Mutebile on how they could close this bank without knowing its liability and assets.

The auditor general in his report noted that some of the documentation of Teefe trust bank where denied to his office. The committee now discovers that this bank was closed without an inventory report, However bank of Uganda’s  deputy governor Louis Kasekende in response said that the law by then did not require them to fill an inventory
report.

“ The nature of documents required at that time did not include the inventory so we don’t have that inventory as of now.’’ `It is true that the Financial Institution statute specifically provides for it, but any institution that is acting prudently if you’re taking over a bank, you can’t move in an institution take it over without documenting what you’re taking over, Katuntu replied

The meeting has now been adjourned to Thursday this week to allow BOU reorganize itself and Provide to the committee the list of assets and liabilities that were taken over by the central bank at the time of dissolving the bank.

A special audit on the closure of Teefe Trust Bank and six others commercial banks by the central bank  was ordered  by the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) in November 2017.

The  committee ordered for  the  auditor after  discovering  that Bank of Uganda  had not  provided the liquidation agent and period for Teefe Trust Bank since it was closed 25 years ago, despite the BOU liquidating  the assets of the bank.

Teefe trust bank was closed in 1993, by the central bank as it was deemed bankrupt. The  special audit report of the Auditor General queried the mistakes  in the closure of Teefe Bank , International Credit Bank Ltd Greenland Bank ,  Co-operative Bank , National Bank of Commerce ), Global Trust Bank (2014) and recently Crane Bank Ltd.

The auditor also observed that there were no guidelines in place to guide the identification of the purchases of the defunct banks.

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