In a decisive move,the Bank of Uganda (BoU) has placed Mercantile Credit Bank Limited under liquidation, effectively revoking its license and ordering the wind-up of its operations. This decision, enacted under Sections 99 and 17 (b) & (f) of the Financial Institutions Act 2004 (as amended), stems from critical issues within the bank that pose a risk to its depositors.
The Bank of Uganda has identified several severe deficiencies at Mercantile Credit Bank, including
substantial undercapitalization, poor corporate governance, and insolvency. These problems have rendered the continuation of the bank’s activities detrimental to the interests of its depositors, necessitating immediate regulatory intervention.
In collaboration with the Deposit Protection Fund of Uganda (DPF), the Bank of Uganda will soon outline measures to ensure depositors can access the insured portions of their deposits. Depositors will be informed of the procedures for retrieving these funds. For the uninsured portions, the handling will be in accordance with Section 105 of the Financial Institutions Act 2004, as amended.
All creditors of Mercantile Credit Bank are requested to submit their claims to the Office of the Director, Financial Stability at the Bank of Uganda within 30 days of this notice. Meanwhile, borrowers are advised to continue servicing their loans by making payments at the Bank of Uganda offices and branches as will be directed.
Any individual or entity in possession of property belonging to Mercantile Credit Bank is required to deliver it to the Director of Financial Stability at the Bank of Uganda.
This significant regulatory action underscores the Bank of Uganda’s commitment to maintaining financial stability and protecting the interests of depositors in the financial system.