Bank of Uganda Closes Mercantile Bank

Bank of Uganda has directed the closure of Mercantile Credit Bank Limited.

Deputy Governor Michael Atingi-Ego used the powers vested in the Bank under Sections 99 and 17(b) & (f) of the Financial Institutions Act 2004 to place the bank under liquidation.

Additionally, the bank’s license has been revoked with effect from June 18, 2014. Similarly, Bank of Uganda has ordered Mercantile Credit Bank to wind up its affairs.

The central bank cites that the continuation of Mercantile Credit Bank Limited’s activities is detrimental to the interests of its depositors.

This is evidenced by the institution’s failure to resolve its significant undercapitalization, poor governance, and insolvency.

Deputy Governor Michael Atingi-Ego also confirmed plans to inform depositors of the arrangements put in place to access the insured portion of their deposits.

He further confirmed that the uninsured portion of the deposits will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as amended.

In the same vein, all creditors have been requested to submit their claims to the Office of the Director, Financial Stability, Bank of Uganda, within 30 days from June 18th.

However, borrowers of Mercantile Credit Bank Limited are expected to continue servicing loans.

These payments will be made at the Bank of Uganda offices and its branches.

“Any person possessing the property of Mercantile Credit Bank Limited should deliver it to the Director, Financial Stability, Bank of Uganda.” Deputy Governor, Michael Atingi-Ego.

Mercantile’s closure comes just a few days after Finance Minister Matia Kasaija painted a positive picture of the economy while reading the National Budget for the 2024/2025 Financial Year.

The Minister confirmed that Uganda’s economy had recovered from a four-year shock, initiated by both internal and external factors, including the coronavirus pandemic.