On February 28, Prime Minister Dr Ruhakana Rugunda assured MPs on the floor of Parliament that government will act on recommendations made by the House Committee on Commissions, Statutory Authorities and State Enterprises on the closure of seven commercial banks.
“When the local banks like the Cooperative Bank closed, the local people got a raw deal because they found it easier to deal with it as it was locally founded,” he said.
Eight months later, no action has been taken.
So what happened to the recommendations in the report?
In a country where rats have been reported to have stolen documents by one accounting officer, it is possible that the COSASE report was eaten by termites while it was on the shelves.
Elijah Okupa, a member of the committee that investigated BoU said they will continue pressing the case to have recommendations implemented
He said it was a positive sign that MP Michael Mawanda had been granted leave to draft a private member's bill seeking to amend the BoU Act.
Mawanda's bill aims at separating the management of the central bank from the board because currently the governor is the chairperson of the board.
"We have not given up and we shall not give up," Okupa said adding that they will push to have the full implementation of the report.
Key recommendations
Presenting the report to Parliament in February the then committee chairperson Abdu Katuntu said there were “serious security laxity” at BoU and said bank officials who flouted relevant laws and regulations ought to be held personally responsible.
COSASE highlighted several instances in which the central bank did not follow the Financial Institutions Act (FIA) and its own regulations on appointing auditors, taking inventories, managing confidential information, and reaching out to potential buyers of the failing banks.
The committee also found serious problems with the disposal of liquidated banks.
For instance, it noted that Nile River Acquisition, a company tapped up to recover Shs145b in loans owed to ICB, Greenland and Co-operative banks was not registered and benefitted from “an incredibly outrageous” discount of 93 per cent.
BoU closed/sold seven banks:Greenland Bank, Teefe Trust Bank, International Credit Bank, Crane Bank, National Bank of Commerce, Gold Trust Bank and Cooperative Bank.
