Mutebile clarifies on BOU mandate amid DTB-Ham saga

Bank of Uganda governor Emmanuel Tumusiime-Mutebile has said that foreign financial institutions that do not use locally-raised deposits to lend to Ugandan entities do not require the central bank's authorisation to lend locally.

"Foreign banks' lending deposits held in jurisdictions other than Uganda are regulated and supervised by their home authorities. It is not mandatory for a foreign bank to establish a representative office in Uganda in order to conduct lending or non-deposit-taking activity," Mutebile said in a statement issued Wednesday.

He explained that Bank of Uganda's regulatory and supervisory powers only apply to financial institution business conducted by Bank of Uganda licensed entities in or outside Uganda or activity which should be licensed as such in Uganda.

"These powers do not extend to activities of foreign banks outside Uganda licensed by foreign regulators," he added.

Mutebile's statement was in response to the recent media debates and discussions related to the regulation and supervision of financial institutions and what amounts to the conduct of financial institutions business in Uganda.

A financial institution is a company licensed to carry on or conduct financial institutions business in Uganda. Bank of Uganda is, by law, given powers to issue a regulation to classify financial services providers as financial institutions where their activities amount to financial institutions business.