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Bank of Uganda tightens grip on commercial banks

By Vision Reporter

Added 2nd June 2009 03:00 AM

BANK of Uganda (BoU) has introduced a strict licence regime to ensure that only credible banking institutions operate in the country, the communications director has said.

BANK of Uganda (BoU) has introduced a strict licence regime to ensure that only credible banking institutions operate in the country, the communications director has said.

By Vision Reporter

BANK of Uganda (BoU) has introduced a strict licence regime to ensure that only credible banking institutions operate in the country, the communications director has said.

“With the passing of the micro finance Deposit Taking Act in 2003, the Financial Institutions and the Foreign Exchange Act in 2004, the regulatory framework of financial institutions was strengthened,” Juma Walusimbi said.

“We have also strengthened corporate governance in financial institutions and reduced concentration of ownership of financial institutions, which results into domineering shareholders,” he explained.

Other measures, he sid include tighter restrictions on credit concentration, insider lending and foreign exchange exposure as well as mandatory corrective action to be taken on distressed financial institutions, including orderly exit from the sector.

This was at the launch of the Kampala City Traders Association Ani Mukozi-The People’s Verdict Quality Awards at Hotel Africana in Kampala.

“BoU has also enhanced market discipline by enforcing transparency and developed regulations to implement the statutes,” he said.

He said BoU was supervising all financial institutions regularly with at least one on-site inspection per institution every year.

Bank of Uganda tightens grip on commercial banks

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