Rugunda directs on reopening of Co-operative Banks

The Prime Minister Dr. Ruhakana Rugunda has directed the minister of finance Matia Kasaija to meet with the Central Bank Governor Emmanuel Mutebile over the reopening of the closed Cooperative Bank Ltd.

Rugunda made the directive on Thursday during the debate of Parliament's report on the closed seven local banks.

The directive came as good news to trade and industry and cooperatives minister,  Amelia Kyambadde, who had informed the Governor that her ministry was considering reviving the Co-operative Bank had fallen on deaf ears.

"The Bank of Uganda, the ministry of finance and the ministry of trade industry and cooperatives should sit to resolve the matter. Government fully supports you on this," Rugunda said.

The Co-operative Bank Limited was closed on the on  May 19, 1999 and the assets sold at a discount of about 93% to Nile River Acquisition Company incorporated in Mauritius. It costs sh7m to liquidate the bank.

But since then members of the cooperative alliance and cooperative unions have been asking for it to be re-opened as it is crucial for their business operations. The other East African Countries such as Kenya have functioning cooperative banks.

Rugunda was asked to make a response on various concerns in the report which includes the closed Cooperative Bank.

"There are many recommendations in the report. Cabinet is going to take them up, investigate some issues further, those who are found culpable the law will take its course," Rugunda said.

Abdu Katuntu chairperson of the Parliament committee on commissions, statutory authorities and state enterprises (COSASE) on last week presented the report of COSACE into circumstances under which the central bank closed the seven local banks that attempted to improve access to financial services. 

According the committee evidence from the Uganda Registration Services Bureau showed that Nile River Acquisition Company, was not registered in Uganda as a local or foreign company which is violation of sections 369 and 370 (1) of the Companies Act.

The committee indicated that the then Director Commercial Banking - Bank of Uganda, Ben Ssekabira, who was the agent of the liquidator/ Receiver of the three defunct banks ( International Credit Bank, Greenland Bank and the Co-operative Bank) was up to the l2th August 2009 the agent of Nile River Acquisition Company.

The committee further noted that between 12th and l6th February 2007, Ben Ssekabira together with Kakembo Katende of JN Kirk and Associates travelled to the United States of America to meet the management of Octavian Advisors plc.

However, while appearing before the committee he stated that he did not know the purpose for his travel to the USA.

The Uganda Co-operative Alliance representing the cooperators in 1992, the Government of Uganda together with USAID made attempts to recapitalize the distressed Co-operative Bank before it was closed.