BoU shuts down Mercantile Credit Bank

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BoU shuts down Mercantile Credit Bank
The central bank says borrowers should continue servicing their loans

Bank of Uganda (BoU) has placed Mercantile Credit Bank under liquidation after revoking its licence and ordering the winding up of its business.

The central bank deemed this action necessary due to Mercantile Credit Bank's failure to resolve significant undercapitalisation, poor corporate governance, and insolvency, which were detrimental to the interests of its depositors.

In a statement released on Tuesday, June 18, Deputy Governor Michael Atingi-Ego said Bank of Uganda and the Deposit Protection Fund of Uganda (DPF) will inform all depositors of the arrangements that will be put in place to enable them to access the insured portion of their deposits.

"The uninsured portion will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as amended," Atingi-Ego said.

Creditors are requested to submit their claims to the Office of the Director, Financial Stability, Bank of Uganda, within 30 days from the announcement.

The central bank advised borrowers of Mercantile Credit Bank to continue servicing their loans by making payments at the Bank of Uganda offices and its branches.

Individuals in possession of property belonging to Mercantile Credit Bank Limited are directed to deliver it to the Director, Financial Stability, Bank of Uganda.

This closure follows the shutdown of EFC Uganda Limited just six months prior.

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