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BoU revokes license of Mercantile Credit Bank Limited

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Simon Kabayo
Simon Kabayohttps://eagle.co.ug
Reporter whose work is detailed

The Deputy Governor of Bank of Uganda, Michael Atingi-Ego has revealed that the Central Bank has revoked Mercantile Credit Bank Limited’s license and ordered it to wind up its affairs.

“In exercise of its powers under Sections 99 and 17 (b) & (f) of the Financial Institutions Act, 2004, as amended, the Bank of Uganda (BoU) has, effective today, June 18, 2024, placed Mercantile Credit Bank Limited under liquidation, revoked its license, and made an order for the winding up of its affairs,” Atingi-Ego stated.

Atingi-Ego said that this action is necessary because the Bank of Uganda has determined that the continuation of Mercantile Credit Bank Limited’s activities is detrimental to the interests of its depositors due to the institution’s failure to resolve its significant undercapitalization, poor corporate governance, and insolvency.

He added that the Bank of Uganda and the Deposit Protection Fund of Uganda (DPF) will shortly inform all depositors of the arrangements that will be put in place to enable them to access the insured portion of their deposit(s).

“The uninsured portion of the deposits will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as Amended,” he noted.

All creditors have been requested to submit their claims to the Office of the Director, Financial Stability, Bank of Uganda, within 30 days from the date of this statement.

“All borrowers of Mercantile Credit Bank Limited are directed to continue servicing their loans by making payments at the Bank of Uganda offices and its branches as shall be advised,” he guided.

Atingi-Ego also cautioned that any person possessing the property of Mercantile Credit Bank Limited should deliver it to the Director, Financial Stability, Bank of Uganda.

Mercantile Credit Bank Limited (MCBL) was incorporated in Uganda on December 1981 and only commenced operations in July 1986.

The Deputy Governor of Bank of Uganda, Michael Atingi-Ego has revealed that the Central Bank has revoked Mercantile Credit Bank Limited’s license and ordered it to wind up its affairs.

“In exercise of its powers under Sections 99 and 17 (b) & (f) of the Financial Institutions Act, 2004, as amended, the Bank of Uganda (BoU) has, effective today, June 18, 2024, placed Mercantile Credit Bank Limited under liquidation, revoked its license, and made an order for the winding up of its affairs,” Atingi-Ego stated.

Atingi-Ego said that this action is necessary because the Bank of Uganda has determined that the continuation of Mercantile Credit Bank Limited’s activities is detrimental to the interests of its depositors due to the institution’s failure to resolve its significant undercapitalization, poor corporate governance, and insolvency.

He added that the Bank of Uganda and the Deposit Protection Fund of Uganda (DPF) will shortly inform all depositors of the arrangements that will be put in place to enable them to access the insured portion of their deposit(s).

“The uninsured portion of the deposits will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as Amended,” he noted.

All creditors have been requested to submit their claims to the Office of the Director, Financial Stability, Bank of Uganda, within 30 days from the date of this statement.

“All borrowers of Mercantile Credit Bank Limited are directed to continue servicing their loans by making payments at the Bank of Uganda offices and its branches as shall be advised,” he guided.

Atingi-Ego also cautioned that any person possessing the property of Mercantile Credit Bank Limited should deliver it to the Director, Financial Stability, Bank of Uganda.

Mercantile Credit Bank Limited (MCBL) was incorporated in Uganda in December 1981 and only commenced operations in July 1986.

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