The Deputy Governor of the Bank of Uganda announced the revocation of the licence of Mercantile Credit Bank Limited, which has also been placed under liquidation, and made an order for the winding up of its affairs.
The central bank is exercising its powers under Sections 99 and 17 (b) & (f) of the Financial Institutions Act, 2004, as amended.
According to the Deputy Governor, 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 undercapitalisation, poor corporate governance, and insolvency.
"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 undercapitalisation, poor corporate governance, and insolvency," said the Deputy Governor in a June 18 statement.
"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 Deputy Governor said that the uninsured portion of the deposits will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as amended.
All creditors have been 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 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 will be advised.
"Any person possessing the property of Mercantile Credit Bank Limited should deliver it to the Director, Financial Stability, Bank of Uganda," reads the statement.
