Isaac Ssemakadde, a city lawyer and founder of the Centre for Legal Aid has said that the central bank and its legal advisors have wrongly interpreted the Financial Institutions Act by rushing to liquidate Crane Bank.
Ssemakadde, in an interview, said that already there were two court rulings from the High Court commercial division and the Court of Appeal which all pin Bank of Uganda for wrongly interpreting the Financial Institutions Act and misusing the Act while managing the banking institutions in the country.
He said that apart from the two courts, Parliament also investigated the Bank of Uganda on the closure/sale of seven banks and concluded that in many instances, the bank acted with impunity and without following the law.
He said there were loopholes in the receivership process of Crane Bank by Bank of Uganda after it sent a statutory manager to manage the bank and make a report but did not wait for him to submit his findings before selling the bank.
Instead, the central bank used police to seize the assets of Crane Bank while Katimbo Mugwanya, the statutory manager, was upcountry.
Ssemakadde said the law can give power to some individuals in institutions like Bank of Uganda but some of those individuals can also use the law to abuse their powers.
He argued that by rushing to liquidate Crane Bank, BoU was acting out of fear and panic yet the matter is still pending at the Supreme Court.