Centenary Bank not closed, says BOU
Nov 12, 2009
Centenary Bank is safe and sound and its customers can continue to transact their businesses normally, the Bank of Uganda said yesterday.<br>Addressing a press conference at the Media Centre, the head of supervision of the Bank of Uganda, Justin Bagyenda
By Cyprian Musoke
Centenary Bank is safe and sound and its customers can continue to transact their businesses normally, the Bank of Uganda said yesterday.
Addressing a press conference at the Media Centre, the head of supervision of the Bank of Uganda, Justin Bagyenda, dismissed press reports that the bank was in danger of closure.
She confirmed that the Police were investigating transactions on a small number of accounts but assured the public that this would not affect the vast majority of customers.
“The investigations also do not affect the financial condition of the bank or its ability to continue carrying on with its banking business in the normal manner,†Bagyenda said.
“Centenary Rural Development Bank is strong and solvent and has sufficient liquidity to meet the ongoing funding needs of its customers.â€
The media reports, she added, presented a misleading account of the investigations being conducted by the Police.
Asked if the fraudulent transactions could endanger the bank, she said: “The issue closure of Centenary is out of the question.â€
CID deputy director Moses Sakira at the press conference said they were investigating a few accounts and banking officers who had been involved in the suspicious transfer of funds.
“Money was fraudulently transferred but the motive is still being investigated. We have not yet come to the conclusion that it was for terrorist purposes,†he said.
Bagyenda declined to reveal the amount in question, saying it was confidential pending the conclusion of investigations. Reports had put the sum at sh5b.
“We knew about it a long time ago but it was not alarming so we did not talk about it,†said Bagyenda.
Suspicious transactions are being monitored under the anti-laundering regulations, pending the passing of the Anti-Money Laundering Bill, she explained.
She added that investigations are not new in the banking sector since fraud is part of the system, and that there were bound to be more investigations throughout the sector.
Percy Lubowa of Centenary Bank said the press reports were likely to cause a run on the bank, yet all banks depend on deposits for survival.
Ochom last week told the media that investigations were instituted after colossal sums of money were wired to several accounts without any explanation.
“We are investigating about 10 accounts over such dealings,†the CID director, Edward Ochom, said.
His remarks came a day after Police detectives raided the head offices of Centenary Bank on Entebbe Road and carted away several computers and documents thought to be crucial for their investigations.
They also held the bank’s head of international transactions, John Henry Sserwaniko, over the alleged fraudulent transactions.
“We want to know the source and for what purpose the money was wired,†Ochom said.
Ochom said Sserwaniko was arrested over failure to carry out a due diligence check despite overwhelming pointers to the dubious nature of the transactions.
“We had credible information that he had been alerted in writing about the fraud when the money was wired, which necessitated him to take action, but he went ahead and authorised its withdrawal,†Ochom said.
Though speculation has been rife that the money could be linked to terrorism activities, Ochom was hesitant to comment, saying the operation was still ongoing and would be extended to other banks.
Centenary Bank is safe and sound and its customers can continue to transact their businesses normally, the Bank of Uganda said yesterday.
Addressing a press conference at the Media Centre, the head of supervision of the Bank of Uganda, Justin Bagyenda, dismissed press reports that the bank was in danger of closure.
She confirmed that the Police were investigating transactions on a small number of accounts but assured the public that this would not affect the vast majority of customers.
“The investigations also do not affect the financial condition of the bank or its ability to continue carrying on with its banking business in the normal manner,†Bagyenda said.
“Centenary Rural Development Bank is strong and solvent and has sufficient liquidity to meet the ongoing funding needs of its customers.â€
The media reports, she added, presented a misleading account of the investigations being conducted by the Police.
Asked if the fraudulent transactions could endanger the bank, she said: “The issue closure of Centenary is out of the question.â€
CID deputy director Moses Sakira at the press conference said they were investigating a few accounts and banking officers who had been involved in the suspicious transfer of funds.
“Money was fraudulently transferred but the motive is still being investigated. We have not yet come to the conclusion that it was for terrorist purposes,†he said.
Bagyenda declined to reveal the amount in question, saying it was confidential pending the conclusion of investigations. Reports had put the sum at sh5b.
“We knew about it a long time ago but it was not alarming so we did not talk about it,†said Bagyenda.
Suspicious transactions are being monitored under the anti-laundering regulations, pending the passing of the Anti-Money Laundering Bill, she explained.
She added that investigations are not new in the banking sector since fraud is part of the system, and that there were bound to be more investigations throughout the sector.
Percy Lubowa of Centenary Bank said the press reports were likely to cause a run on the bank, yet all banks depend on deposits for survival.
Ochom last week told the media that investigations were instituted after colossal sums of money were wired to several accounts without any explanation.
“We are investigating about 10 accounts over such dealings,†the CID director, Edward Ochom, said.
His remarks came a day after Police detectives raided the head offices of Centenary Bank on Entebbe Road and carted away several computers and documents thought to be crucial for their investigations.
They also held the bank’s head of international transactions, John Henry Sserwaniko, over the alleged fraudulent transactions.
“We want to know the source and for what purpose the money was wired,†Ochom said.
Ochom said Sserwaniko was arrested over failure to carry out a due diligence check despite overwhelming pointers to the dubious nature of the transactions.
“We had credible information that he had been alerted in writing about the fraud when the money was wired, which necessitated him to take action, but he went ahead and authorised its withdrawal,†Ochom said.
Though speculation has been rife that the money could be linked to terrorism activities, Ochom was hesitant to comment, saying the operation was still ongoing and would be extended to other banks.