Nabbanja Directs BoU to Investigate Theft of Customers’ Money in Banks

Prime Minister Robinah Nabbanja. PHOTO/PARLIAMENT

Kampala, Uganda | THE BLACK EXAMINER | Prime Minister Robinah Nabbanja has instructed the seemingly inert officials at the Bank of Uganda to investigate the circumstances surrounding customers losing money due to fraud involving staff at commercial banks.

“I direct the Bank of Uganda to investigate the various complaints from customers regarding syndicates operating within the banks,” Nabbanja informed Parliament on Friday.

She added, “Several customers have experienced mysterious losses from their accounts. I saw that someone who was out of the country in the United Arab Emirates had saved Shs100 million, placed it in Centenary Bank, and it appeared that the money was withdrawn by unknown individuals.”

This development follows Centenary Bank’s acknowledgment of a “collaboration between a fraudster and one of our staff to reset a PIN, enabling transactions at agents where funds were withdrawn.” This revelation came after a customer reported the mysterious withdrawal of Shs 113 million from her Centenary Bank account.

The bank stated that the matter was under police investigation, and disciplinary action was taken against the staff involved.

Recently, a whistleblower called on the Bank of Uganda to investigate Bank of Africa for unprofessional practices, including insider lending and the misappropriation of money from customers’ dormant accounts using counterfeit court garnishee orders. The whistleblower alleged that an “insider employee named Ivan Matende was caught red-handed, having successfully withdrawn significant sums from dormant accounts in the bank on five occasions.”

On September 30, Moses Mukasa, located at Printers Arcade, Nasser Road in Kampala, expressed his concern to the Governor of the Bank of Uganda, claiming to have discovered a draft document intended for false payments by the bank. He mentioned witnessing individuals at the Nasser Road premises preparing fake court garnish orders for use at Bank of Africa Uganda.

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A garnishee order is a legal means to enforce a court judgment and recover money from the judgment debtor.

Bank of Africa has denied these claims, asserting that they maintain the highest standards of financial integrity and security.

Prime Minister Nabbanja also referred to media reports of people recording themselves in Equity Bank, where a customer, Farook Ssekandi, recorded a video alleging that the bank had failed to assist him in recovering Shs 10 million he lost due to possible internal fraud.

In these widely publicized cases, the central bank has not clarified whether it is conducting any investigations.

Incidents of fraud have been on the rise in commercial banks in Uganda. Forensic auditors revealed that Crane Bank, taken over by the Bank of Uganda in 2016, was insolvent due to fraud, insider lending, money laundering, corruption, nepotism, and failure to adhere to basic banking best practices.

Former Deputy Governor of the Bank of Uganda, Louis Kasekende, stated in 2019 that “nearly all the banks closed or sold in Uganda since the turn of the century failed because of outright fraud by shareholders, excessive lending of funds to insiders (managers and shareholders), collusion to cover up irregularities between the board of directors and management, and misreporting the true state of the bank’s financial position, among other factors.”

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