Lawmakers sitting on the committee on Commissions, Statutory Authorities and State Enterprises (COSASE) have grilled officials from Bank of Uganda questioning the powers they used in liquidating the defunct Crane Bank with Shs 478.8bn.
The Central Bank officials led by the Governor, Tumusiime Mutebile were appearing before COSASE during their exit meeting on the ongoing probe into the closure of seven defunct banks.
The Committee Vice Chairperson, Anita Among who was chairing the committee asked BOU Executive Director Bank Supervision, Twinemanzi Tumubweine to explain who approved the funds that were given to the statutory manager of Crane Bank at that time.
Twinemanzi told legislators that the approval for liquidating Crane Bank was given by the Deputy Governor, Louis Kasekende.
Kasekende would then be asked to explain how the funds were disbursed from Bank of Uganda to the statutory manager towards liquidation of Crane Bank Limited.
He was also tasked to reveal the instruments of power he used as well as the minutes indicating how the amount that was in a deficit was arrived at.
Among asked how Kasekende went ahead to approve the funds that were withdrawn from the general reserve fund having been advised by the Minister of Finance not to go ahead and withdraw the funds.
“When you look at Section 15 (1) of the Bank Act, it says that the bank may from time to time consult with the Minister to transfer funds from the general reserve to the capital of the bank,” Among noted.
“If you got permission from the Minister, we would require you to present that letter, and getting permission from the Minister would require approval from Parliament,” Among added.
In response, the Deputy Governor noted that the general reserve fund is created by the Board and in case the bank makes profit, the Board can make a decision to transfer part of the profit to the reserve fund.
“If you look at the general capitalization of Bank of Uganda, the general reserve fund is part of that capitalization and this is provided for in the Act,” Kasekende said.