Mutebile Attacks Sudhir Over Fraud in Defunct Crane Bank, You Couldn’t Have Redeemed It

  • by Mark Kalule
  • July 17, 2018

Bank of Uganda Governor Emmanuel Mutebile this morning made remarks at the Uganda Bankers’ Association Annual Bankers’ Conference at the Kampala Serena Hotel, saying that the the Central Bank had to take over Crane Bank because the owners who were responsible for its problems couldn’t solve them.

Crane Bank, formerly owned by tycoon Sudhir Ruparelia was taken over by the Bank of Uganda before its assets and liabilities were bought by dfcu Bank.

The theme of the conference was Financial Sector Stability: Managing Risk in a Fast Growing and Fast Changing Environment.

The Governor in his speech emphasized that while it is not possible for regulators to guarantee that no bank will ever fail, because that would require the elimination of risk-taking by banks – which would in turn hinder the very purpose of financial intermediation – regulators can ensure that bank failures are the exception rather than the norm.

He explained the central bank’s intervention in Crane Bank saying;

“After the BoU had intervened in Crane Bank and taken it over in October 2016, an inventory of its assets and liabilities was commissioned and carried out by a reputable accounting firm. This inventory found that Crane Bank was massively insolvent, with core capital of negative Shs240 billion, as a result of mismanagement and fraud. The notion that this bank could have been rehabilitated by its owners – the same people who were responsible for its failure – if only the BoU had provided more liquidity support and allowed the owners to remain in control, is not tenable. In reality the BoU had no other options, if it wished to minimise the losses incurred by the bank and protect the interests of its depositors, other than to take over Crane Bank and resolve it.”

Full Speech: