BoU under spotlight over Shs270bn injected in Crane bank

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Crane Bank

By Kagenyi Lukka

Bank of Uganda claims it injected Shs478bn into Crane Bank as liquidity support before selling it to dfcu Bank at Shs200bn.

However, the Auditor General says Shs272.6bn of the said liquidity support to prevent Crane Bank from collapsing cannot be traced.

This is contained in a confidential report handed to the Speaker of Parliament, Rebecca Kadaga, on Tuesday.

The February 2019 reported titled “Special Audit Report on the Shs478b injected into Crane Bank Limited by Bank of Uganda”, says BoU officials approved and remitted $53.16m (Shs195bn) to Crane Bank by Telegraphic Transfers (TTs).

The money was released through the bank’s Nostro Account 3582025085001 after BoU officials sent instructions to Citi Bank in New York.

A nostro account is an account that a bank holds in a foreign currency in another bank.

Auditor General, John Muwanga, could not find the additional Shs77.5bn that BoU officials claim they transferred to 46 Crane Bank branches across the country.

“I was not able to confirm that the funds were withdrawn by bona fide account holders at the respective branches because the daily teller transaction reports provided didn’t indicate the customer account numbers and customer names,” Muwanga wrote.

The MPs on the House Committee on Commissions Statutory Authorities and State Enterprises (Cosase), led by chairman Abdul Katuntu who are investigating closure of seven commercial banks asked BoU officials to account for the public funds.

According to AG’s report, the audited Crane Bank annual accounts for the period starting January 1, 2016 to January 25, 2017 could not be traced.

The missing details of the recipients of the money came to the fore after Cosase ordered for a special audit into the accountability of Shs478bn.

BoU took over Crane Bank on October 20, 2016 for three months and later sold it without proper valuation.

Governor Emmanuel Tumusiime- Mutebile told MPs that Crane Bank was under-capitalised and its precarious financial status posed systemic risk to the entire banking sector.

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