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‘BoU killing Uganda’s Financial Sector’- Crane Bank

Crane Bank insiders have spoken out following Bank of Uganda’s decision to take over management of the commercial bank and suspension of its board. For the last 6 months, Crane Bank management has been engaging Bank of Uganda as it also negotiated with potential investors to recapitalize, an insider at Crane Bank said expressing betrayal by the central bank.

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“This is malice, Bank of Uganda has made it difficult for us to recapitalize. One wonders what their intentions are. We are engaging investors to shares in the bank and here comes Bank of Uganda. We are not a broke bank, look at our assets, we can recover,” the insider, who has been privy to the negotiation lamented.

Sudhir Ruparelia, the owner of Crane Bank in various media reports confirmed that the bank was talking to a potential investor to buy some shares in the bank. Bank of Uganda said any commercial bank can sell shares to a potential investor but must meet the requirements of the law. The central bank also said Crane Bank was financially stable when social media messages suggested that the commercial bank was dissolving. A statement by Christine Alupo, Bank of Uganda communication director refuted such claims.

An official at the bank has predicted that such decision by Bank of Uganda will hurt the economy. He said the central bank is malicious. He warned that banks will suffer as people will not trust them with their money. This he said will result into disastrous liquidity.

“People will get their money out of banks and the banks will have no money. This is not good for the industry which is fragile. This is a mistake by the central bank.” The official explained.

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Bank of Uganda governor said the action to take over management of Crane Bank was taken upon a determination by Bank of Uganda that Crane Bank Limited is a significantly undercapitalized institution as defined by the law, poses a systemic risk to the stability of the financial system and that the continuation of Crane Bank’s activities in its current form is detrimental to the interests of its depositors.

Mutebile has since appointed Statutory Manager Edward Katimbo Mugwanya to act as Managing Director.

It remains unclear if BoU will get another investor or hand over the bank to another financial institution in Uganda.

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