Bank of Uganda Closes Undercapitalised Mercantile Credit Bank

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The Bank of Uganda (BoU) has, effective today, June 18, 2024, placed Mercantile Credit Bank Limited under liquidation, revoked its license, and made an order to wind up its affairs.

This action, the Central Bank said, is necessary because it has determined that the continuation of Mercantile Credit Bank Limited’s activities is detrimental to the interests of its depositors due to the institution’s failure to resolve its significant undercapitalization, poor corporate governance, and insolvency.

“The Bank of Uganda and the Deposit Protection Fund of Uganda (DPF) will shortly inform all depositors of the arrangements that will be put in place to enable them to access the insured portion of their deposit(s). The uninsured portion of the deposits will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as amended,” the Deputy Governor, Michael Atingi-Ego, announced in a statement on Tuesday.

All creditors are requested to submit their claims to the Office of the Director, Financial Stability, Bank of Uganda, within 30 days from the date of this statement.

All Mercantile Credit Bank Limited borrowers are directed to continue servicing their loans by making payments at the Bank of Uganda offices and branches, as shall be advised.

Any person possessing the property of Mercantile Credit Bank Limited should deliver it to the Director, Financial Stability, Bank of Uganda.

The closure of Mercantile Credit Bank Limited comes just six months after the closure of EFC Uganda Limited.