Bank of Uganda has effectively closed Mercantile Credit Bank Limited by pacing it under liquidation, revoking its license, and making an order for the winding up of its affairs.
This is revealed in a press statement issued by the Deputy Governor, Ating Ego today 18th June, 2024.
“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,” reads the statement in part.
The Deputy Governor says 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.
“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),” says Michael Atingi-Ego
He also says that the uninsured portion of the deposits will be handled in accordance with Section 105 of the Financial Institutions Act 2004, as Amended.
“All creditors are 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,” it reads further.
Meanwhile, 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.
“Any person possessing the property of Mercantile Credit Bank Limited should deliver it to the Director, Financial Stability, Bank of Uganda,” BOU directs.