Crane Bank Uganda limited has been taken over by the Bank of Uganda. This follows various rumours about Uganda’s third largest commercial bank on social media that had created panic among the Banks customers.
According to a statement issued to the press by Professor Emmanuel Tumusiime-Mutebile, Governor Bank of Uganda, “this action has been taken upon a determination by Bank of Uganda that Crane Bank Limited is a significantly under-capitalised institution as defined by 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”.
The Bank of Uganda therefore, under under Section 87(3), 88(1)(a) & (b) of the Financial Institutions Act 2004, has effective, Thursday October 20, 2016, taken over the management of Crane Bank Limited.
Further to this Act, a “significantly under capitalised” financial institution is one which does not comply
with any of the following—
(a) hold the minimum capital funds, unimpaired by losses, of at least fifty percent of the requirement prescribed in
section 26 of this Act;
(b) hold core capital of at least fifty percent of the requirement prescribed in section 27 of this Act;
(c) hold total capital of at least fifty percent of the requirement prescribed in section 27 of this Act.
(5) This section shall not be construed so as to preclude the Central Bank from closing any financial institution under any other provision of this Act.88. (1) The Central Bank may take over management of a financial institution if—
(a) it is conducting its business in a manner contrary to this Act;
(b) the continuation of its activities is detrimental to the interests of depositors;
(c) it refuses to submit itself to inspection by the Central Bank as required by this Act;
(d) its licence has been revoked under section 17 of this Act; or (e) it is engaged in or is knowingly facilitating criminal activities.
The Bank of Uganda has also appointed a statutory manager of the affairs of Crane Bank Limited and suspended the Board of Directors of Crane Bank Limited.
The Bank of Uganda assures the public that Crane Bank Limited will remain open and its operations will continue normally, but under the management and control of Bank of Uganda.
The Bank of Uganda further reassures the public that it will continue to protect depositors’ interests and maintain the stability of the financial sector.