Summary:
- Bank of Uganda has ordered the closure of Mercantile Credit Bank Limited due to financial instability, directing liquidation and revoking its license, affecting depositors and creditors.
The Bank of Uganda closed Mercantile Credit Bank Limited. Deputy Governor Michael Atingi-Ego invoked the authority granted by Sections 99 and 17(b) & (f) of the Financial Institutions Act 2004 to initiate the bank’s liquidation. Effective June 18, 2014, the bank’s license has been revoked. The central bank has also instructed Mercantile Credit Bank to wind down its operations due to concerns that its continuation poses risks to depositors, citing significant undercapitalization, governance issues, and insolvency.
Deputy Governor Michael Atingi-Ego has outlined plans to inform depositors about accessing the insured portion of their deposits and managing the uninsured portion in accordance with Section 105 of the Financial Institutions Act 2004. Creditors have been asked to submit their claims to the Office of the Director, Financial Stability, Bank of Uganda, within 30 days from June 18th. Borrowers of Mercantile Credit Bank Limited are expected to continue servicing their loans at Bank of Uganda offices and branches.
“All individuals in possession of assets belonging to Mercantile Credit Bank Limited are directed to surrender them to the Director, Financial Stability, Bank of Uganda,” emphasized Deputy Governor Michael Atingi-Ego.
This decision follows Finance Minister Matia Kasaija’s recent positive assessment of Uganda’s economic recovery during the presentation of the National Budget for the 2024/2025 Financial Year.
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