MPs have Summoned Mutebile and officials in the ministry of Finance Officials Over Crane Bank.
Crane Bank, which used to be Ugandas third largest banking institution, was early this year taken over by DFCU Bank Limited, more than four months after the Central Bank took over its management. All Crane Bank assets and liabilities were then transferred to DFCU.
Before the takeover, and in order to avoid a complete collapse of Crane Bank, the government used Shs200 billion in taxpayers’ money to rescue the fourth largest bank in the country.
According to sources in Bank of Uganda (BoU), the decision to inject Shs200b in Crane Bank came after Cabinet ministers warned the collapse of Crane Bank posed a risk to the entire financial sector and insisted that something should be done to avert the crisis.
Mr Mugunga explained that Treasury works closely with BoU to ensure monetary stability, adding that: “Currently, the Crane Bank issue is one of the situations that needed to be prudently managed. It is not uncommon for such challenges to warrant interventions.”
Asked to spell out the amount to BoU and whether Parliament was consulted before using taxpayers money, Mr Mugunga said: “I am not aware or at liberty to tell how much and where the Central Bank deployed the resources as provided. They can explain how they used the money.”
A member of Finance Committee of Parliament said that the committee had received information through a whistleblower that Treasury officials had used taxpayers’ money to bail out Crane Bank.
The Committee is expected to summon Finance minister Matia Kasaija and Secretary to Treasury Keith Muhakanizi to explain the rescue package.
What is not yet clear in the deal is how that money was deployed to Crane Bank even though sources say that the Shs200b was disguised as BoU capitalization before the money went to Crane Bank.