By Mubiru Ivan
Dfcu bank still owes Bank of Uganda Shs112 billion for Crane Bank sale, Watchdog Uganda has learnt.
A few days ago, the Parliamentary Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) discovered that since January 27, 2017 up to date, dfcu which bought off Crane Bank has only paid Shs98 billion out of the Shs200 billion agreed price sale for the defunct bank.
In October 2016, BoU took over Crane Bank on grounds of undercapitalization, placed it under receivership before selling the commercial bank to dfcu in January 2017.
Evidence tabled before Cosase showed that BoU gave dfcu two and half years to pay the Shs200 billion without interest.
“This looks more like loaning. Someone is holding your money so it should attract interest naturally but we don’t understand why you gave out Crane Bank on loan without interest,” Cosase chairperson Abdu Katuntu inquired from BoU officials who were appearing before the committee last Friday.
Brig Francis Takirwa,Uganda People’s Defence Forces(UPDF) Representative in parliament said, “ If dfcu could borrow Shs200b to take over Crane Bank why couldn’t the same gesture be extended to Crane Bank to sought out its problems instead of selling it,”
The committee further revealed that BoU only relied on an inventory report and not an assets and liabilities report, as required by the Financial Institutions Act, when it closed and sold Crane Bank.
In defence, Katimbo Mugwanya, who was the Central Bank’s statutory manager for Crane Bank, said “BoU has got a valuation method called Prudential Standard for valuing loans in all commercial banks. This valuation standard uses time-based values. If a loan is given today and the money is not used in 30 days, there is an objective way of valuing the value of that loan,”
The committee is currently investigating top Central Bank officials over their role in the alleged irregular closure and sale of seven commercial banks between 1993 and 2017.
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