October 14, 2016 No Comments
It is a fact that Crane bank Uganda limited has been one of the biggest banks in Uganda. As at December 2014, Crane Bank Uganda was reported to be the third biggest bank in Uganda after Stanbic Bank Uganda. Crane Bank has close to 600,000 depositors in Uganda alone and is believed to have expanded to Rwanda and was planning to open branches in South Sudan. For a bank that started fairly recently, that is 1995 to grow at such a massive rate is quite baffling.
Trouble started showing in late 2014 when Crane bank lost a staggering 3 billion shillings in non-performing loans. Business man Sudhir Ruperelia owns 48.67 percent of the bank with shares held by him and his close family members. As of late September Mr. Ruparelia was complaining about the Ugandan economy being run down. This he stated in an interview with a local newspaper recently after a group of business men requested for bailout from the government. The signs of animosity had been sown and crane bank was reported to be on the verge of collapse as Sudhir started seeking for buyers.
Sudhir is known to be a shrewd business man and he owns a vast empire of property in Kampala City. Critics believe that the cause of the Crane banks troubles stem from Mr. Sudhir breaking banking rules and channelling money from the bank to run his private property empire.
Also read: The 5 biggest banks in Uganda
Sudhir who owns close to 30 buildings in the Central Business district has not been able to recover the property investments he put in and yet the fact of the matter is that the property market bubble in Uganda has burst, forcing him to earn peanuts from his multi billion investments.
Uganda’s economy has been growing at a sluggish pace because of high interest rates on loans to private businesses. Many businesses that borrowed heavily in the past 4 years have either collapsed or had their loans written off. This has therefore had a ripple effect on businesses that rent premises in the CBD and many could not afford to rent Sudhir’s premises.
It is alleged that the issue of Crane bank collapse is not new because the Bank of Uganda was aware about Crane Banks liquidity problems but could not act because the powers that be thought the bank could be saved. Crane bank is one of the biggest locally owned banks in Uganda; therefore its collapse would be detrimental to the economy.
By suburb2suburb curator