Uganda: Govt Starts Paying Depositors of Closed Mercantile Credit Bank

27 June 2024
The Observer (Kampala)
By John Musinguzi

Government has started paying depositers of the recently closed Mercantile Credit Bank Ltd.

The Bank of Uganda placed the bank under liquidation, revoked its licence and ordered for the winding up of its affairs, officially closing it on June 18, 2024.

The central bank's statement to the public signed by deputy governor Michael Atingi-Ego said the action was taken after conclusion that "continuation of Mercantile's activities is detrimental to the interests of its depositors due to, among other factors, the institution's failure to resolve its significant undercapitalization, poor corporate governance and insolvency" and due to Bank of Uganda's commitment to "protect depositors' interests and maintain the stability of the financial sector."

BoU's statement also advised borrowers of the bank to continue servicing their loans by paying at BoU offices within 30 days; any person possessing property of Mercantile Credit bank to deliver it to the director of Financial Stability at BoU; and to direct any inquiries to the same officer."

At a media briefing on June 24, Dr Julia Olima Oyet, the chief executive officer of the Deposit Protection Fund of Uganda (DPF), said the fund has commenced payment of individual depositors with balance of Shs 1 million or less, through mobile money, on June 22.

Oyet stressed that for all categories of protected depositors, payment shall take into consideration all outstanding debts and any other obligations to the bank. Secondly, deposits above the protected limit of Shs 10m shall be handled by Bank of Uganda, not DPF.

"Note that the name on your national identification card must perfectly match with your mobile money number," she stressed, regarding depositors with less than Shs 1m.

Payment of individual account holders with between Shs 1m and Shs 10m will commence on July 1, 2024; this will be done through Stanbic bank, Lugogo branch, and only after receipt of an SMS notification. The depositor must present a valid and original (not photocopy) national identity card.

COMPANY, JOINT AND TRUST ACCOUNTS

Payment of company, joint and trust account holders will commence on July 8. These depositors are expected to present relevant documents to the DPF offices at AHA Towers, Plot 7 Lourdel road, Nakasero, Kampala.

Company account holders have to present a letter confirming the account name, and names and signatures of account signatories; a registered board resolution indicating the bank account to which the payment should be made; certificate of incorporation and location of the company; memorandum and articles of association; and photocopies of valid original national IDs of signatories.

The Uganda Registration Services Bureau is expected to certify certain documents.

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