Mercantile Credit Bank Limited which was headquartered in Kampala
HABARI DAILY I Kampala, Uganda I Uganda’s financial sector has been shaken once again following the closure of Mercantile Credit Bank Limited, in what the Bank of Uganda referred to as insolvency and mismanagement.
In a recently issued statement, BOU said it has decided to take action and placed the bank under liquidation, revoked its license, and ordered the winding up of its affairs.
“This action has been prompted by issues such as insolvency, under-capitalization and poor corporate governance,” reads part of a statement signed by BOU’s Deputy Governor, Michael Atingi-Ego.
The move, he said, was in exercise of its powers under sections 99 and 17(b) and (f) of the Financial Institutions Act 2004, (as amended).
“Effective June 18, 2024, we have decided to place Mercantile Credit Bank Limited under liquidation, revoked its license, and made an order for the winding up of its affairs. This action is necessary because BOU has determined that the continuation of Mercantile Credit Bank Limited’s activities is detrimental to the interests of its depositors due to poor corporate governance and insolvency,” reads part of the statement.
The statement further noted that BOU and the Deposit Fund of Uganda will shortly inform all depositors of the arrangements that will be put in place to enable them to access the insured portion of their deposits, and the uninsured portion of depositors will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as amended.
Atingi-Ego advised all creditors to submit their claims to the office of the Director, Financial Stability, and Bank of Uganda within 30 days from the date the statement was issued.
“Any person possessing property of Mercantile Credit Bank Limited should deliver it to the director, Finance and Stability, Bank of Uganda,” he stressed.
Following the closure of EFC Uganda Limited in January 2024, Mercantile becomes the second financial institution to be closed this year by the Bank of Uganda, over insolvency.
