MPs order comprehensive audit on defunct banks

The Parliamentary committee on Statutory Authorities and State Enterprises (COSASE) has directed the Auditor General to audit defunct banks and the processes of their liquidation.

Committee chairperson Abdul Katuntu said that they want a comprehensive audit of the liquidation process of the defunct banks, to cover the aspects of costs of liquidation, the assets, liabilities and the current status.

Katuntu said Bank of Uganda which is in charge has never accounted to any institution about the process of liquidation and yet these are public institutions.

He said the institutions had a lot of security liquidated and yet the cost of liquidation seems to be very astronomical.

The defunct banks include Crane Bank which was last year taken over by by DFCU Bank.

Others are Cooperative Bank, International Credit Bank, Greenland Bank, Teefe Bank, Nile Bank, National Bank of Commerce, Uganda Commercial Bank and Global Trust Bank.

The committee gave the Auditor General 90 days to audit all these banks.

Katuntu said there has not been any report on the liquidation processes of these banks, indicating the exact amount of money the banks had, their debts, the securities of the bank and how much they were sold.

Most of the banks collapsed due to depleted liquidity, mismanagement, and bad loans where banks give out money on loan but people don't pay back.


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