Business
Banking borders in EAC to disappear
Publish Date: Feb 24, 2014
Banking borders in EAC to disappear
The move is intended to make banking more convenient.
  • mail
  • img
newvision

By Samuel Sanya

Following the single tourist visa, a major deal between banking switch services in Uganda, Kenya, Rwanda and Tanzania is in the offing to unlock more value in the East African banking, finance and trade sectors.

Banking switch services allow a customer of one bank to access their account at ATM’s of another bank without opening an additional account.

Uganda currently has 5.3 million commercial bank accounts spread out in 27 licensed commercial banks. There are 13 banks on the Ugandan switch run by Interswitch East Africa.

“We are soon signing a Memorandum of Understanding with Kenya’s Kenswitch, Rwanda’s Rswitch, and Tanzania’s Umoja. Our goal is to expand to the entire African continent,” Olumuyiwa Asagba, the Interswitch boss said at the Serena Kampala Hotel last week.

“We want to be a catalyst for the East African intergration and the move towards having a cashless economy,” he added.

The addition of Centenary Bank to the Ugandan switch last week, has doubled the number of interconnected ATMs in the country to 280 from 146.

Fabian Kasi, the Centenary Bank boss, pointed out that the expanded ATM network makes banking more convenient.
He said this will lower banking costs and boost tourism and trade across East Africa.

Emmanuel Mutebile, the Bank of Uganda governor, noted that the switch service will further entrench electronic payments in Uganda and cut banking industry overhead costs currently at 7% of total banking assets (about sh1 trillion).

Cumulative commercial bank assets amounted to sh15.5 trillion at the end of December 2012. Mutebile noted that this level is unacceptably high and should be brought down by collaborative efforts.

“The adoption of IT solutions to the delivery of services will enable financial institutions to reduce spending on physical premises and on staff costs,” he said.

“The innovations are already delivering huge benefits for customers in terms of the speed, reliability and costs of making payments.”

Anthony Kituuka, the KCB head of corporate banking, said the move will be a major boost for banks without a regional branch network.

“The East African economy benefits when its citizens are able to move from one country to another and withdraw money in the local currency to pay for goods and services,” he said.

The statements, comments, or opinions expressed through the use of New Vision Online are those of their respective authors, who are solely responsible for them, and do not necessarily represent the views held by the staff and management of New Vision Online.

New Vision Online reserves the right to moderate, publish or delete a post without warning or consultation with the author.Find out why we moderate comments. For any questions please contact digital@newvision.co.ug

  • mail
  • img
blog comments powered by Disqus
Also In This Section
Uganda’s economy is on track
Lately, the public has been awash with myths and self-invented theories about the economy, the depreciation of the shilling....
Oil tumbles in Asia as Greek vote shakes world markets
Oil fell in Asia Monday as investors digested the implications of Greece rejecting tough austerity demands from creditors....
Gov’t cautioned on trade agreements signing
Government has been cautioned against signing international trade and bilateral agreements without scrutinizing their impact on indigenous business firms....
Domesticate SDGs to household level – minister
Uganda’s state minister for economic monitoring, Henry Banyenzaki, has called for the domestication of the Sustainable Development Goals (SDGs)....
Media trained on intellectual property rights
Media practitioners have been sensitized on the importance of intellectual property rights and the procedures for registration...
Greek crisis could weaken Ugandan shilling further
The failure by Greece to beat Tuesday’s deadline to repay $1.7b (sh5.4 trillion) owed to the IMF could trigger a further depreciation of the Uganda shilling....
Do you think Ugandan graduates are the worst in the region?
Yes
No
Can't Say
follow us
subscribe to our news letter