By our reporter
COSASE is shocked to find out that Bank of Uganda denied crane bank limited a 157 billion loan to recapitalize and used 478 billion shillings to close it.
Members of parliament on the committee of commissions, statutory authorities and state enterprise which is probing the closure of seven commercial banks grilled BoU officials to explain why they denied Crane Bank Limited time to recapitalize and closed it 10 days before the ultimatum that had been fixed by the central Bank.
Members wondered how crane bank which was among the top successful banks in 2013 to the extent of purchasing National Bank of Commerce run out of capital just after three years and closed for being significantly under capitalized.
then Legislators tasked BoU officials to furnish the committee with the Crane Bank Limited General Ledger to establish how the defunct bank became insolvent at a rocket speed. But the former BoU staff Edward Katimbo Mugwanya advised the committee that a general ledger was too huge to fit in the committee room which prompted the committee to task them to submit a soft copy.
The committee was shocked to find out that Crane Bank only needed 157 billion shillings to recapitalize and the central bank refused to rend them that money but opted to spend 478 to solve its insolvency. this left members asking themselves why BoU did not chose to capitalize crane bank which was cheaper. the BoU director financial markets Benedict Sekabira told committee that the crane bank presented its bank branches as a collateral security which the central bank found so weak to back up the loan.
The committee also found out that Dfcu Bank which bought Crane Bank Limited tendered in its bid on 20th December 2016 a day before the inventory report of crane bank which was made BY PWC was released which prompted the committee to question how Dfcu got crane bank’s confidential information before other bidders .