BOU Revokes Mercantile Credit Bank’s License

The Bank of Uganda (BoU) has taken decisive action against Mercantile Credit Bank Limited, announcing the revocation of the bank's license and its placement under liquidation, effective immediately. This move, made under the authority granted by Sections 99 and 17 (b) & (f) of the Financial Institutions Act, 2004, comes as a response to the bank's failure to address its significant undercapitalization, poor corporate governance, and insolvency, which posed a threat to the interests of its depositors.

A statement by BOU signed by the Deputy Governor Michael Ating-Ego notes that all depositors of Mercantile Credit Bank Limited will be duly informed of the forthcoming arrangements to facilitate access to the insured portion of their deposits, while the uninsured portions will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as Amended. 

Creditors of the bank have also been urged to submit their claims to the Office of the Director, Financial Stability at the Bank of Uganda within a 30-day period starting from the date of this statement. Additionally, borrowers of Mercantile Credit Bank Limited are directed to continue servicing their loans by making payments at the Bank of Uganda offices and its branches, in line with the guidance that will be provided.

Furthermore, anyone in possession of property belonging to Mercantile Credit Bank Limited is requested to surrender it to the Director, Financial Stability at the Bank of Uganda, as part of the proceedings related to the liquidation process, the statement by BOU further states. 

The Bank of Uganda vows to ensure a transparent and orderly resolution to the situation, with a focus on safeguarding the interests of depositors, creditors, and other stakeholders amidst the bank's closure.