The Bank of Uganda has not received any formal communication from the Kampala City Traders Association (KACITA) about their intention to start a bank, a bank of Uganda official has said.
In a telephone interview on Sept.19 Christine Alupo, the acting Bank of Uganda director for communications said: "To the best of my knowledge we haven't known that yet."
Alupo said any group of people or company intending to start a commercial bank has to notify Bank of Uganda because it is the regulator of the banking sector in Uganda. She said the applicant has to fulfill all the requirements before attaining a license. One of the requirements to start is putting aside the Shs25billion minimum capital.
The association's chairman Everest Kayondo told The Independent in a recent interview that they have completed a concept paper about the move and will have their bank started in the first quarter of 2013.
Kayondo said the decision to start the traders' bank is fueled by the recent high commercial bank interest rates charged on the traders which forced many to close business.
"We want our members to access cheap services," he said adding, banks have taught us a lesson.
According to the Bank of Uganda commercial banks' weighted average rates jumped from 21.7% in July 2011to 26.9% in July 2012.
The jump was caused by the hike in the central bank rate which touched 23% in October. The hike in the CBR was intended to fight the high inflationary pressures which hit a 30.4% mark, the highest since 1993.