The minister of Finance, Planning and Economic development, Matia Kasaija has called for diligence and care in the management of financial matters in the country.
Speaking Monday at the African Regional Committee conference on deposit insurance, minister Kasaija warned that once financial markets are handled carelessly, they could adversely affect the economic prospects of the country.
He alluded to the Global economic meltdown of 2008 which led to the collapse of giant banks like Lehman brothers and rendered 29 other banks bankrupt.
“So the financial sector in my humble language is a millipede. You have to be careful. If you don’t touch it well, it will disappoint you. I would say you have to be very careful; the financial sector is a very sensitive animal” Kasaija cautions.
As such, the minister said government has come up with a Depositor Protection Fund (DPF) as one way of insulating depositors in the event of bank failures.
Kasaija pointed out that like many other Ugandans, he has lost colossal amounts of money in several banks that have wound up.
“Greenland, I had an account there so I know what I am talking about. Even the one of Kato, ICB I had also an account so I know how I suffered. I am one of the victims”.
The minister stressed that Bank of Uganda supervision mechanisms need to be strengthened not only to promote but propel financial stability as well.
His words come nearly a week after the deposit insurance limit was raised from 3 million shillings to 10 million shillings
This is the guaranteed amount of money that a person who places money in bank can receive in the event that the bank is declared insolvent or suffers from related misfortunes.
Deposit Protection Fund, an autonomous agency created under the Financial Institutions Act, 2004 that provides insurance to depositors and deposit taking micro finances institutions.
Previously under the central bank, the fund was operationalized in 2017 after the coming into law of the Public Finance Management Act, 2016.