Uganda Bankers Association (UBA) has strongly condemned the recent spate of negative press targeting one of the leading commercial banks in the country, and warned that this could destabilize the country’s entire banking.
The negative press carried mostly on online news websites targeted Dfcu Bank, which early last year acquired tycoon Sudhir Ruparelia’s Crane Bank, which had been placed under receivership by the Central Bank when it became insolvent.
The Bankers’ association, which unites all the major banks in Uganda, in a statement called on the relevant government authorities to intervene in this situation to stop the campaign from crippling he banking sector.
UBA stressed that Uganda’s banking sector has been progressing steadily and that the media campaign could derail it fast.
“Targeted and calculated negative reporting about the banking sector has the potential of undermining confidence in the industry and risks triggering undesired panic with unintended averse consequences for the economy,’ the association warned.
Dfcu, which after the Crane Bank acquisition became the country’s second largest bank, claims through its lawyers, that the fake news media campaign is being “sponsored, coordinated and propagated by Sudhir’s son Mr. Rajiv Ruparelia.
The bank’s lawyers of Kalenge, Bwanika, Ssawa and Co. Advoctes in a recent letter, threatened to sue Mr Rajiv for Corporate Defamation, Interference with Dfcu business, Criminal Libel and Offensive Communication.
Earlier in another statement, Dfcu bank said the media reports sought “to cause unnecessary concern among customers by casting a shadow of uncertainty on the future of dfcu and as such should be treated with the utmost contempt they deserve.”
According to the bankers’ association, Uganda’s banking sector has been promising lately.
Over the past few years, UBA says, the sector recorded deposit balances averaging Shs 20Trillion, up from Shs. 14 trillion in 2015.
“The sector is still witnessing good credit growth supported by ratio of nonperforming loans coming down,” UBA stated.
“We are confident that the banking and overall financial sector is stable and resilient. However, maintaining stability remains a responsibility for all of us.”
The association went on to praise media houses that disregarded the propaganda, and asked for support from relevant authorities to “provide the right environment for the banking and financial sector.”