Parliament has asked government to compensate the former employees and owners of the seven commercial banks closed by the Central Bank since 1993.
Parliament said the former employees, shareholders and owners should be compensated within a period of 90 days. The House however rejected compensation for owners involved in fraudulent activities that led to the collapse of the banks.
On Thursday Members of Parliament were considering and approving recommendations out of the Report of the Committee on Commissions, Statutory Authorities and State Enterprises (Cosase) on the closure of seven banks: Crane Bank, Teefe Trust, Co-operative Bank, International Credit Bank (ICB), Greenland Bank, Global Trust Bank and National Bank of Commerce (NBC).
Cecilia Ogwal (FDC, Dokolo district) said that there was need for the government to hastily compensate the former shareholders and workers of the banks because they were gravely affected by the closure.
“Some of these people have grown old and others have died waiting for all this time to be compensated for the losses they incurred as stakeholders in these financial entities when they were shut down,” Ogwal said.
The Speaker of Parliament Rebecca Kadaga said that the Committee had also neglected to mention the employees of the closed banks who abruptly lost their jobs when the banks
“These people were unexpectedly left jobless without any source of income and they therefore suffered as much as the shareholders and creditors of the closed banks so they should be compensated within the suggested 90 days,” she said.
The Chairperson of Cosase Abdu Katuntu said liabilities amounting to Ushs503.76 million were still outstanding as at the time of writing the report out of a total of Ushs1.6 billion held at closure of the banks and recommended they should be paid off.
Among other recommendations from Cosase and Parliament are that the positions of the Chairperson and Vice Chairperson of the Board of Governors be separated from that of the CEO and Deputy CEO of the Bank as a good practice of governance to avoid conflict of interest.
They also said that the Bank of Uganda Act must be amended since it is obsolete and not aligned with the Uganda Constitution of 1995 within 90 days and failure to amend the law within 90 days gives opportunity to Private Members to move a Bill amending the law.