Standard Chartered Bank Uganda has commenced investigations into alleged acts of fraud including claims that the financial institution’s relationship managers extort money from SME clients seeking loans.
This follows a whistleblower report to the Managing Director and Central Bank Governor Emmanuel Tumusiime-Mutebile which alleged that it had become a “practice that most of the traders in the section of SME Banking pay a certain percentage of the amount they intend to obtain from the Bank before processing the loans.”
It‘s said most of the relationship managers usually ask for 5-10 percent of the principal and that they “usually give the picture that their bosses have to be bribed to have them process their loans.”
Yet, said the whistle-blower, “most of this money ends up in their pockets…further they still go ahead to ask for compulsory tips once the approval is done.”
Stanchart Speaks Out
Stanchart’s Country Brand and Marketing Manager, Cynthia Mpanga told ChimpReports on Tuesday that the bank was in “receipt of information” from the Whistleblower.
“We take the matters or accusations levied against our employees very seriously and are currently investigating the matter,” said Mpanga.
“We cannot therefore comment further until investigations are concluded.”
The whistleblower’s claims threaten the reputation of one of the largest banks in the country.
The revelations could as well lend some credence to implications that bank staff are thriving from corruption in the country.
Standard Chartered Bank said in a statement that it “has a rich history in Uganda of over 105 years, we pride ourselves on having a strict code of conduct, robust processes and procedures that guide how we conduct business” and that it holds “our employees to high ethical standards.”
The whistleblower alleged that a one Patrick Ishanga has built a network of several relationship managers whom he executes all these dubious deals with.
“He is actually the one ‘boss’ these relationship managers tell the clients that needs to be sorted before a loan goes through. Every loan that these relationship managers present for approval must come with a bribe. Those that don’t present some money are usually delayed and sometimes denied/not approved/frustrated,” said the whistleblower who did not disclose his identity.
The bank’s management also was informed that because of reportedly extorting money from their clients, many of them have built a large capital base that they run several money lending businesses.
“Some run money lending businesses as if they belong to their family members. They act as middlemen between money lenders and clients. Yet in actual sense they are the money lenders. This makes them rob the bank of potential clients and profitability.”
The whistleblower identified a one Swizzin Twesigye, Head Retail Banking, as a big money lender whose business operations are run by relatives.
It also was alleged that while fulfilling requirements for approval of loans especially when there are buy-offs of loans from other banks, bank statements are forged from Nasser and Nkrumah Road.
“Your relationship managers have learnt the art of preparing fake bank statements. This presents false information to the bank as most of the buy- off loans from other banks usually are brought on board because they are bad loans. Because they extort money from clients and there is a clique of relationship managers associated with the Head Retail Banking, it is always easy to have all these approvals.”
The whistleblower went on to reveal that some of the relationship managers present fake land titles, fake search results from Ministry of Lands and even fake valuation reports.
“Some properties are overvalued when one bribes. If a client is not willing to bribe his way, his properties are undervalued as a punishment. The acceptance of the fake land titles comes from the fact that a network of fraudulent characters has been within the bank,” the whistleblower added.
On behalf the institution, Mpanga said the Bank “adheres to international and country laws and regulations.”
She emphasised: “We have Anti-Bribery and Corruption policy (ABC) in place that guides all our dealings and relationship with internal and external stakeholders.”
The whistleblower observed that some of the relationship managers smuggle documents from the bank’s registry, photocopy clients’ files and share this information to other fellow bankers from other banks.
“In all this, the information is given out at a fee. Generally, there is a lot of fraud and connivance with clients that if it is not addressed, the bank is seated on a time bomb,” the report noted.
But Mpanga reassured the bank’s commitment to protect clients’ interests.
“We value our clients and our relationship with them. We are committed to serving our clients with excellence and meeting their needs,” said Mpanga, adding, “Clients are at the core of our business priorities.”