Bank of Uganda has taken over the operations of Imperial Bank following a decision by the Central Bank of Kenya to suspend the activities of Imperial Bank of Kenya, the majority shareholders of the bank.
This morning the Central Bank of Kenya placed Imperial Bank Kenya limited under receivership for 12 months after it was declared unsafe and unsound for investment and lending.
Imperial Bank of Kenya and Mukwano group of companies owned 64 and 36 percent shares respectively in Imperial Bank Kampala.
Bank of Uganda will now control Imperial Bank until it finds an investor to buy the shares of the defunct Imperial Bank of Kenya.
Imperial Bank in Uganda has over 5000 accounts registered in the Ugandan market.
Information obtained from Bank of Uganda shows that Imperial Bank had 1302 savings accounts and 4035 current accounts.
Emmanuel Mutebile Tumusiime, the Governor Bank of Uganda says they decided to invoke section 88 of the Financial Institutional Act 2004, which mandates Bank of Uganda to take over the management of a commercial bank to protect depositor’s money.
This particular section allows the Bank of Uganda to take over the management of a commercial bank among other things if it conducts its business in a manner contrary to the act, if the continuation of its activities is detrimental to the i\nterests of depositors; refuses to submit itself to inspection by the Central Bank as required by this Act or if it is engaged in or is knowingly facilitating criminal activities.
According to Mutebile, Bank of Uganda was prompted to take over Imperial Bank by an earlier announcement by the Central Bank of Kenya this morning that placed the Imperial Bank of Kenya under receivership.
The Central Bank however maintains that the Imperial Bank and its branches will remain open until further notice.