UAH is secular, intellectual and non-aligned politically, culturally or religiously email discussion group.

{UAH} DFCU Bank Bosses Fail To Secure Loan from BoU As Liquidity Crisis Bites Harder

DFCU Bank Bosses Fail To Secure Loan from BoU As Liquidity Crisis Bites Harder

The situation at the troubled DFCU bank has gone from being worse to worst following a huge liquidity crisis that hit the bank in recent times.

According to high ranking official at the Nakasero based bank headquarters, the bank management have run to the Bank of Uganda for a crisis meeting and requested the Central bank to put a lien on treasury bills and help them borrow money to enable them run business. A lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation.

"Unfortunately, Bank of Uganda told us that no they can allow because we are already over exposed in the market. I tell you we have huge liquidity crisis". This bank official narrated to us.

This bank official said they ran to bank official for rescue after reaching a limit on interbank lending. The interbank lending is a process in which banks extend loans to one another for a specified term.

These loans are for maturities of one week or less, the majority being overnight.

In 2017, DFCU bank acquired Crane bank from Bank of Uganda for a paltry Shs200 billion yet its value at the time of takeover by BoU was Shs1.3 trillion, to their detriment.

One year down the road, the bank has been struggling to sustain business country wide.

Another senior official narrated to us that the bank was too weak to manage all the branches across the country.

"These people were not interested in Crane bank business; they only wanted its bad books which were worth about shs650billion". He said

Bank bad books are loans which are not written on balance sheet.

DFCU bank has also seen massive resignations of its top management bosses including the Executive Director William Sekabembe, board member also banks largest shareholder Malik Deepak the CEO Arise BV and CDC Group which sold its shares with the bank.

The bank lawyers in London have also reportedly advised that all money collected from written off crane bank loans should be treated as a liability after learning that it could be asked to produce it and whoever collected it face criminal offense of taking money by false pretense.

Disclaimer:Everyone posting to this Forum bears the sole responsibility for any legal consequences of his or her postings, and hence statements and facts must be presented responsibly. Your continued membership signifies that you agree to this disclaimer and pledge to abide by our Rules and Guidelines.To unsubscribe from this group, send email to:

Sharing is Caring:



Post a Comment

Popular Posts

Blog Archive