BoU closes another bank

The Central Bank of Uganda has in exercise of its powers under Sections 99 and 17 (b) and (f) of the Financial Institutions Act, 2004 announced the closure of Mercantile Bank .

BOU deputy governor, Michael Atingi-Ego said on Tuesday that the bank has been placed under liquidation, revoked its license, and made an order for the winding up of its affairs.

“This action is necessary because the Bank of Uganda 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,” Atingi-Ego said.

He noted that BoU and 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. 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.”

Borrowers of Mercantile Credit Bank Limited have been directed to continue servicing their loans by making payments at the Bank of Uganda offices and its 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 development follows the closure of EFC Uganda Limited earlier this year.