Government will take up and act on recommendations made by the House Committee on Commissions, Statutory Authorities and State Enterprises on the closure of seven commercial banks.
In a statement made during a debate on the report, on 27 February 2019, the Prime Minister, Hon. Ruhakana Rugunda said that he was happy that the probe brought to light several inconsistencies in the closure of the banks.
“When the local banks like the Cooperative Bank closed, the local people got a raw deal because they found it easier to deal with it as it was locally founded,” he said.
The Prime Minister promised will take the Committee’s recommendations seriously and act on them appropriately.
“We agree for example that there should be separation of Central Bank supervision and liquidation into two departments to curb the inconsistencies that have arisen,” he said.
Rugunda said that the government officials should be straight-forward and follow all the laws and rules while exercising their duties.
“There should be a clear record of anything we do as civil servants for the sake of transparency and good governance; it was wrong for the Central Bank to conduct these dealings without record,” he added.
He also noted that there was no need for the Bank to hire private law firms, MMAKS and Kirkland Advocates, to oversee the take over and closure of the institutions.
“It was an unnecessary and costly venture especially since BOU has a well-qualified legal team which is competent enough to handle such issues,” Rugunda said.
The Prime Minister further noted that there is need for reforms like not having the Governor of the Central Bank [Emmanuel Mutebile] as the Chair of the Board of Management to avoid giving too much power to one individual.
He also promised that the Cabinet is going to follow up the recommendations and, “all those found culpable of wrong-doing will be penalised”.
Parliament was handling the debate on the report of the COSASE probe on the closure of the seven banks which include Greenland Bank, Teefe Trust Bank, International Credit Bank, Crane Bank, National Bank of Commerce, Gold Trust Bank and Cooperative Bank.
The Committee noted a number of inconsistencies key among them being closure and sell of the defunct Banks without any inventory or documentation and grossly undermining the legal procedures of bank closure by the Central Bank.