The Auditor General has written a confidential report to the Speaker of Parliament, Rebecca Kadaga, indicating that Shs272.6b, which Bank of Uganda injected in Crane Bank to save it from collapsing cannot be traced.
The Shs272.6b is part of Shs478b BoU officials say they injected into Crane Bank as liquidity support when they put it under receivership on October 20, 2016. BoU’s position was that Crane Bank was under-capitalised and it posed a systemic risk to the entire banking sector. The bank was later sold to DFCU Bank in January 2017 for a paltry Shs200b.
The AG’s office carried out a special audit on the Shs478b and found out that BoU approved and remitted 53.6m dollars [about Shs195b] to Crane Bank via Telegraphic Transfers.
The money was allegedly requested by undisclosed Crane Bank customers and was released through the bank’s Nostro Account 3582025085001 after BoU officials sent instructions to Citi Bank in New York.
The AG’s reports stated that they however couldn’t trace the final destination of the said funds as the Nostro Account [an account which a bank holds in foreign currency in another bank] didn’t indicate the beneficiary account names, account numbers and beneficiary bank.
The finding points to more rot in BoU as Parliament’s Committee of Commissions, Statutory Authorities and State Enterprises [COSASE] probes the closure of seven commercial banks including Crane Bank.
The AG’s report also queried another Shs77b.5b that BoU claims was sent to the 46 Crane Bank branches across the country.
“I was not able to confirm that the funds were withdrawn by bona fide account holders because the daily teller transaction reports provided didn’t indicate the customer account numbers and names,” the AG report reads in part.
BoU’s explanation to the AG according to Deputy Governor Loius Kasekende was that Crane Bank upgraded the banking software from the Bank Master Core system to T24 system, bringing out the mismatch in information.
The AG’s report also states that the audited Crane Bank annual accounts for the period from January 1, 2016 to January 25, 2017 could not be traced.