Deposit Protection Fund starts paying closed Mercantile Credit Bank depositors

The Deposit Protection Fund of Uganda has announced that it has started  paying the depositors of  Mercantile Credit Bank  which was closed by Bank of Uganda last week.

DPF CEO, Dr. Julia Clare Olima Oyet told journalists on Monday that having  received notification from Bank of Uganda about the closure of the bank and revocation of its license, they have started the process that will see those that fall under their mandate paid.

“DPF has commenced payment, through mobile money, of individual depositors with balances of shs1 million and below,” Oyet said.

She said that in order to receive payment through mobile money, the names in National Identification Card must perfectly match with those registered against the mobile money number.

According to the DPF boss, payment of to individual account holders whose protected deposit is above shs1 million and up to shs10 million will commence on July, 1.

“This payment shall be made through Stanbic Bank Lugogo branch during working hours. Depositors should go to the bank after receipt of an SMS notification and should present valid national IDs to the bank.”

According to the law, in the event of failure or closure of a contributing institution(bank), DPF pays the respective depositors up to shs10 million and those  with above the shs10 million limit are paid the balance by the liquidator appointed by BoU.

The Central Bank of Uganda last week announced the closure of Mercantile Credit Bank over poor corporate governance and failure to recapitalize.

The development has since left the bank’s 2850 depositors in  tears.

Speaking on Monday, the DPF CEO explained that depositors with company, joint and trust accounts will starting July, 8, 2024 be required to start sending their documents for verification.

“These depositors shall be required to submit the documents listed hereunder to the Deposit Protection Fund Office at AHA Towers, Plot 7 Lourdel Road, Nakasero, Kampala, during working hours.”

The requirements for company account holders include a letter confirming the account name in Mercantile Credit Bank Limited, and the names and signatures of the signatories to the account, a registered board resolution indicating the bank account to which the deposit should be paid, certificate of incorporation and location of the company , Memorandum and Articles of Association and copies of the valid original National Identification Cards of  the signatories and all the documents must be certified by URSB.

According to the Deposit Protection Fund, joint account holders are required to present copies of their valid national IDs for the signatories, resolution signed by all account holders indicating the preferred mode of payment while trust account holders are required to present the registration number of the trusted deed if it is registered and for the unregistered one,  for Ugandans, the national ID and identification number issued by government or passport will be required.

“Payment of the protected deposits to all categories of depositors listed above shall be made less any outstanding loans or any other obligations to the bank.”