Afriland Bank’s customers told to withdraw their deposits as BoU approves bank’s request for liquidation

Bank of Uganda (BoU) has advised all customers of Afriland First Bank Uganda Limited to withdraw their deposits from the bank.

“All depositors of Afriland First Bank Uganda Limited are encouraged to withdraw their deposits from Afriland Bank Uganda Limited’s premises.” BoU said on Thursday.

The development comes a day after BoU approved the bank’s request for voluntary liquidation.

In a statement released on Thursday, the deputy Governor, Micheal Atingi-ego confirmed that BoU, on Wednesday, approved Afriland’s request to apply to the High Court for voluntary liquidation.

“Bank of Uganda (BoU), in its exercise pf powers under Section 98(1) of the Financial Institutions Act (as amended), on Wednesday, May 25, 2022, approved a request for Afriland First Bank Uganda Limited, to apply to the High Court for voluntary liquidation,” Atingi said in a notice.

According to the deputy Governor, Afriland’s decision for voluntary liquidation was an outcome of a strategic business review by the shareholders, Afriland First Group.

The development means that the bank is now a solvent financial institution and according to BoU, all depositors and other verified creditors shall be paid in full.

“All other verified creditors shall be paid in full by the liquidator that has been appointed by the shareholders of Afriland First Bank Uganda Limited.”

It’s worth noting that Afriland was licensed by the central bank as a commercial bank in 2019.

However, according to analysts, the bank’s journey has been a rocky one because of the stiff competition in the country’s financial sector.