7 December 2018

Uganda: Banks Closure - Mutebile, Chiefs Disown Bagyenda

Kampala — Bank of Uganda (BoU) Governor, Mr Tumusiime Mutebile, and two directors yesterday told the Parliamentary inquiry into closed commercial banks that former BoU director for banks supervision, Ms Justine Bagyenda, without authority entered a Memorandum of Understanding that kick-started the closure of Global Trust Bank (GTB) and selling it to the Development Finance Company of Uganda Bank Limited(dfcu) in 2014.

Mutebile said Ms Bagyenda's signing of the MoU between the central bank and duck on July 10 2014 was done without authority of the BoU board and was contravening the Bank of Uganda Act. He said the Act stipulates that it's only the Governor, Deputy Governor and Secretary to the Board that can sign an agreement on behalf of the central bank.

Bank of Uganda closed GTB on July 25 and sold it to dfcu, 15 days after Ms Bagyenda signed the MoU with Mr Juma Kisaame, the dfcu managing director.

Ms Bagyenda claimed she consulted the BoU before signing the MoU with dfcu bank which led to the closure and subsequent sale of GTB.

However Ms Susan Wasagali Kanyemibwa, the secretary to BoU Board Affairs, presented before the committee minutes of the board meetings between January and December 2014 which indicated that the matter of the agreement between Bagyenda and Dfcu was not discussed.

In her defence, Ms Bagyenda said meetings on closed banks are not recorded with minutes but are only attended by the Governor, Deputy Governor and Director of Banks Supervision.

The committee chairman, Mr Abdu Katuntu questioned how Ms Bagyenda entered into the MoU with Dfcu bank and why she identified dfcu as best buyer.

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