By Spy Uganda
The Bank of Uganda has revealed that Tropical Bank Limited (TBL), which had been categorised as ‘undercapitalized’ a few months ago, is now ‘financially healthy’ and able to continue protecting depositors’ interests.
Officials at BoU made the announcement in a statement published in all local dailies which indicates that after auditing TBL’s Financial Statements, BoU auditors established that the Bank is a viable business concern that clients should trust with their deposits.
Following the allegations of being undercapitalized which cropped up last year, in accordance with Section 86 of FIA 2004, Bank of Uganda directed the Management of Tropical Bank to submit a Capital Restoration Plan.
The statement issued by Dr Adam Mugume, Acting Deputy Governor, indicates that this directive was complied with before the end of March 2020, and during this time, “the shareholders injected additional capital amounting to Shs3.8Bn, thereby putting the Bank in position to continue operating.
The implementation of the submitted Capital Restoration Plan is on-going, and is in accordance with the timelines specified in Section 86 of the FIA 2004 which allow for up to 180 days for this process,” Mugume’s statement reads in part.
It continues that; “As of today, TBL is well capitalised and Bank of Uganda reassures the general public that it will continue to protect depositors’ interests and maintain the stability of the financial sector.”
It should be noted that as of December 31, 2019, Audited Annual Financial Statements of Tropical Bank indicated undercapitalization to the tune of Shs3.8Bn.
The development meant that the Bank was not ‘financially healthy to operate in accordance with Bank of Uganda regulations and was at the verge of being wound up due to insolvency.
However, after the shareholders injecting in the over Shs3.8Bn, we can ably inform the general public too that they should have no queries about TBL’s capacity to protect the deposits and to banish all fears that it may end up like the numerous commercial banks that have closed in Uganda before.
It should be noted that Tropical Bank Limited, which is headed by Buganda Royal Prince Kassim Nakibinge as Managing Director, is the only Muslim-owned bank in Uganda.
