The parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) has summoned Bank of Uganda governor, Emmanuel Tumusiime Mutebile.
Mutebile is expected to appear before the committee on Wednesday to explain the bank’s incompetence that led to the eventual collapse of Crane Bank.
He will also answer questions on how banks including Global Trust Bank and National Bank of Commerce [NBC] were closed.
Last week, Members of Parliament led by Budadiri West MP, Nathan Nandala Mafabi called for an investigation of Bank of Uganda over its role in the supervision of financial institutions.
In mMoving a motion to have a select committee carry out this investigation, Nandala-Mafabi said that despite the Bank of Uganda being equipped with rigorous mechanisms for supervision of commercial banks, there have been reports that mismanagement of Crane Bank, its collusion, corruption and insider trading went undetected.
“The systematic failure by the Bank of Uganda to fulfill its core statutory mandate is an indicator of incompetence and potential complicity on the part of BoU,” Nandala Mafabi said.
Nandala-Mafabi added that the Central Bank officials should be held responsible for failing to supervise the performance of Crane Bank while giving false information. Crane Bank was the third best operating bank in the country.
“How could the collapse of Crane Bank have happened overnight when over five years, the Bank of Uganda was reporting it as the best performing? Someone must be held responsible,” Nathan Nandala Mafabi said.
The legislator also called for an investigation into the audit firm Ernst & Young, which was responsible for carrying out audits of Crane Bank.
“Ernst & Young must be brought to book for reporting that there was no problem. There must have been collusion which must be investigated,” he concluded.
The seconder of the motion, Hon. Raphael Magyezi, said that according to the Bank of Uganda Act, the Central Bank is supposed to ensure high standards of conduct in the banking sector but it failed with Crane bank.
“BoU exhibited a high level of incompetence. Crane Bank would have been saved if the Central Bank had done its duty,” he said.
Magyezi wants an investigation into claims that Crane Bank was the third best bank and yet acquired credit from the Central Bank.
“Any guarantee by the Bank of Uganda must be sanctioned by Parliament. Could the role of the House have been abused by the guarantee of shs. 200billion and shs. 400 billion respectively?” he asked.
The Rt. Hon. Deputy Speaker, Jacob Oulanyah, deferred debate on the Motion to this week pending clarification by COSASE.