The minister for finance, planning and economic development Matia Kasaija did little to save some of the defunct despite some of the shareholders of the defunct banks like Dr. Sudhir Ruparelia showing interest in saving their institutions.
“It is very unfortunate that there is a patient who is still bleeding and you as a doctor gives him poison to finish him off. It is really unfortunate. I thought the best way to do things is to see if the bank has any chance to survive, then we do anything possible to make it survive.” Kasaija said.
The Minister made the remarks while meeting with MPs on the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) where he had been summoned to appear alongside the Board and Top Management of Bank of Uganda and discuss some of the governance challenges facing the Central Bank.
The Minister’s remarks were in response to a concern raised by Legislators who detailed some of the confessions by the former shareholders of National Bank of Commerce (NBC) during their meeting with the Committee on Monday.
Mathew Rukukaire former Chairman NBC Bank told the Committee that despite the harsh and unfair treatment that NBC suffered at the hands of some senior Bank of Uganda officials at the time of its abrupt closure, NBC capital stood at more than 97% of the minimum threshold of Shs10Bn.
Rukikaire told the Committee that Bank of Uganda shouldn’t have taken the drastic action of choosing closure because NBC wasn’t significantly undercapitalised but the central Bank should have applied some of the options available under the law like requiring NBC directors to provide capital restoration plan to meet the shortfall of the alleged Shs300M within 90-100 days as required by section 87(1) of the Financial Institutions Act 2004.
He wondered how Bank of Uganda that had previously required NBC to raise Shs7Bn and the same NBC shareholders managed to raise such substantial sum in four days didn’t have confidence that the shareholders could raise Shs300M in a reasonable time.