The three main shareholders of the defunct National Bank of Commerce have accused Bank of Uganda officials of breaking rules and unfairly selling their bank to Crane Bank Limited.
Appearing before the Parliament committee on Commission, Statutory Authority and State Enterprises (COSASE) on Monday, former Prime Minister, Amama Mbabazi; former Supreme Court judge, George Kanyeihamba and business man Amos Nzeyi said their bank had solid and manageable capital base before its closure in 2012.
The trio in a statement read by former NBC Bank Chairman, Mathew Rukikaire pinned former BOU Executive Director for Supervision, Justin Bagyenda and Benedict Ssekabira former Director Financial Markets Development Coordination for subjecting them to “harsh treatment”.
“Despite the harsh and unfair treatment that NBC suffered at the hands of some senior Bank of Uganda officials at the time of its abrupt closure, NBC capital stood at more than 97% of the minimum threshold of Shs10bn,” said part of the statement.
Mbabazi and colleagues remarked that their bank’s capitalization status didn’t warrant closure.
“BOU shouldn’t have taken the drastic action of choosing closure drastic action because it wasn’t a significantly undercapitalized. BOU should have applied some of the options available under the law like requiring NBC directors to provide capital restoration plan to meet the shortfall of the alleged Shs 300M within 90-100 days as required by section 87(1) of the Financial Institutions Act 2004.”
They argued that no commercial bank has ever been subjected to the same harsh treatment.
“Evidently, this option wasn’t exercised by BOU the way it did with other banks.”
NBC is among seven commercial banks sold by BOU since 1993.
Nzeyi, who said he will not be able to ever forgive Bagyenda, wondered why BOU failed to trust the capacity of NBC shareholders even after them raising Shs 7bn in four days.
“It is confusing that Bank of Uganda which had previously required NBC to raise Shs7Bn and the same NBC shareholders had managed to raise such substantial sum in four days didn’t have confidence that the shareholders could raise Shs300M in a reasonable time. We believe, they wanted to fail our bank.”
NBC officials are yet to know the price BOU sold their bank.