Centenary Bank, one of the local financial institutions

As tough economic times bite hard, the Bank of Uganda has urged the public to report commercial banks charging higher-than-official-service fees..

“Bank customers who are being offered/charged differently from what is published are advised to report to the Bank of Uganda,” the BOU said as it published the different interest rates and service fees charged by the various commercial banks operating in the country.

The Central Bank says the publication of interest rates and bank charges for personal accounts is one way of promoting transparency and competition in the banking services.

The publication shows that 24 commercial banks operate in the country, many of which are foreign-owned with mother banks in their home countries. Centenary Bank, Housing Finance Bank and Finance Trust Bank come up as the only commercial banks with a home base in Uganda.

The publication of the commercial banks’ services shows prime lending rates (PLRs) ranging from 19 percent to 25 percent as of July 1,2017. But Stanbic Bank, one of the largest by assets and capitalisation, currently has its PLR tagged at 18 percent.

Stanbic Bank and Bank of India offer cheapest PLRs compared to NC Bank’s PLR of 25 percent. Other banks offer PLRs of between 20 percent and 23.5 percent.

However, the PLRs offered by commercial banks do not match with the central bank rate (CBR) which stands at 10 percent.

BOU, which is the regulator of the fiscal policy as well as the banking sector wants commercial banks to cut their PLRs down towards its CBR of 10 percent to spur private sector credit growth.

However, commercial banks insist that their lending rates are cautionary given the high rate of the non-performing loans (NPLs) that has left many banks making huge losses.