Mercantile Credit Bank licence revoked

The central bank is exercising its authority under Sections 99 and 17 (b) & (f) of the Financial Institutions Act, 2004, as amended.

According to the deputy governor, the central bank has determined that the continuation of [the bank's] is detrimental to the interests of its depositors due to the institution's failure to address its significant undercapitalisation, poor corporate governance, and insolvency.

"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," said the governor in a statement on June 18.

"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 deputy governor mentioned that the uninsured portion of the deposits will be managed in accordance with Section 105 of the Financial Institutions Act 2004, as amended.

Bank of Uganda Pulse

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 (MCBL) have been directed to continue servicing their loans by making payments at the Bank of Uganda offices and its branches as advised.

"Any person possessing the property of [the bank] should deliver it to the Director, Financial Stability, Bank of Uganda," reads the statement.

Mercantile Credit Bank Limited was registered as a merchant bank in 1981 and commenced operations in 1986.

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