Over the past few weeks, the commissions commitee of Parliament has been probing how the Cooperative Bank in 1997 was incorporated replacing and taking over assets and liabilities of a previous Bank, incorporated under the Cooperative Societies Act in 1964, under the same name.
Vincent Wabwoya, the Budadiri East MP said it was just common sense for MMAKS Advocates to see that there conflict of interest for them to advise the Central Bank and also remain legal advisors to different commercial banks.
Asked by MPs for the plan, the Executive Director Supervision Twinemanzi Tumubweine said that plans to revive the Bank were never there. The response angered MPs who queried a decision by BOU to sell off Crane Bank instead of following a plan to revive it as demanded by the Financial Institutions Act.
The committee on Commissions, Statutory Authorities and State Enterprises COSASE has directed the Auditor General to carry out an audit into the Shillings 478 billion injected into Crane Bank Limited by the Central Bank.
Mbarara Municipality MP Michael Tusiime accused BoU of abdicating its regulatory mandate and handed it to directors of commercial banks to determine the fate of other financial institutions that were in business competition with banks they represent.
MPs on Thursday learned of a confidential purchase agreement which Bank of Uganda entered into with DFCU Bank on 10th July 2014 before Global Trust Bank was eventually closed on 25th July 2014. This means that the Central Bank never managed Global Trust Bank for a minimum of six months as required by the Financial Institutions Act.