By Kagenyi Lukka
When Carne Bank’s long-serving managing director, A.R. Kalan, left in 2014 and never returned to Uganda, it is believed that the writing was on the wall for any keen financial observer at the Central Bank that something fishy was happening.
Indeed, a few years down the lane, Crane Bank, one of the largest local financial facilities in terms of assets, was interestingly closed.
This is the bank, which according to Bank of Uganda figures, was the biggest local bank.
But all over a sudden the Central Bank was telling the public that Crane Bank had become significantly under-capitalised.
These Central Bank statements were a sharp contrast of the figures that key top financial players at Bank of Uganda posted a few months before Crane Bank was closed.
These figures indicated that Crane Bank’s paid-up capital stood at sh201b, ten times more than the Bank of Uganda requirement of sh25b.
Yet despite the clear signals, the key question underpinning the Crane Bank closure episode is: Who slept on job?
In my view, two people slept on the job. The first person is Justine Bagyenda, the embattled former executive director in charge of supervision at the Central Bank. Bagyenda was at the heart of supervision of commercial banks, including Crane Bank, and in my view she would have detected the cracks early if at all she was interested in doing her job well.
The other person, who squarely takes the blame, and in my view, the largest portion of blame, is Louis Kasekende, the deputy Governor of Bank of Uganda.
In the hierarchy of the Central Bank structure, Bagyenda was directly supervised by Kasekende.
It therefore follows that when things go wrong in the docket of someone you supervise daily, you all take the collective blame.
Kasekende began his term as deputy Governor in 2010. He is highly educated and exposed to financial frugality and fiduciary affairs.
In fact, the country highly depended on his knowledge in the financial sector to safe guard the financial contours of banks operating in the country.
It is therefore surprising that a man of this caliber didn’t arrest the financial woes of Crane Bank early enough.
Instead of arresting the problem, Kasekende and other Central Bank officials, who are paid to supervise commercial banks and also monitor their financial standing in the market economy, they looked the other side as things went bad.
Surprisingly, after painting rosy figures regarding the performance of Crane Bank, they chose to tell the public at the tail end of events that the bank’s financial health had become frail.
The Kasekende’s of this world added that instead of the required sh25b paid-in capital, Crane Bank had less than sh12b of the required amount.
This is the tragedy that Kasekende should explain to the public as the immediate supervisor of Bagyenda, the woman whose duty was to supervise commercial banks.
For a bank that had an estimated 500, 000 customers, it was absurd that the Kasekende group didn’t arrest these challenges on time.
In fact, at the end of December 2015, Crane Bank held sh1.3 trillion customer deposits. Yet going by the Central Bank figures, in earlier reports, the profit measure were put at sh50.6 trillion.
Then all over a sudden, the Kasekende group was telling the public that the non-performing loans had also shot from sh142b to sh19b in just one year.
What went wrong? Who slept on the job? Where was the Central Bank? Who is lying?
These are the questions that Louis Kasekende has to answer.
In fact, under the face of this outright negligence and failure to perform the work that tax payers pay Kasekende to do, a forensic audit of the deputy Governor of the Central Bank, will be a timely intervention.
The author Kagenyi Lukka is a current affairs analyst and aspiring MP Ikiiki County.