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The Central Bank has tasked commercial banks to implement risk management practices and controls to prevent under capitalization.
The Bank’s Director of the Pension and Administration department Ralph Bakashabaruhanga says banks should avoid disappointing and abusing their depositors trust.
He advises that commercial banks ensure rigorous internal controls that help them to control fraud among other measures.
This follows the closure of Mercantile Credit Bank last week and EFC Uganda in January due to “serious issues that put customer savings at risk.
“These institutions failed their depositors, employees and broader financial due to under capitalization, poor cooperate governance and insolvency, these are not isolated incidents these representor preterm of government failures that have been and enduring cause of banking sector instability in Uganda,” Mr. Bakashabaruhanga commented.
Bakashabaruhanga made the remarks while addressing students and officials from the Uganda Institute of Banking and Financial Services during their Annual General Meeting held in Kampala on Thursday.