EFC Uganda Limited was closed in January 2024
The Deposit Protection Fund (DPF) is grappling with challenges in tracing all account holders from two recently liquidated commercial banks, leaving millions of shillings unclaimed.
In January and June 2024, the Bank of Uganda closed EFC Uganda Limited and Mercantile Credit Bank Limited, citing poor corporate governance and failure to meet the minimum capital requirements for financial institutions.
Following their liquidation, the Central Bank assured that all protected depositors—those with no more than 10 million Shillings in deposits—would be compensated promptly by the DPF, Uganda’s statutory insurance scheme for depositors.
However, Patrick Ezaga, the DPF Director of Communication, says they are still holding funds meant for claimants who remain untraceable.
Speaking during a media stakeholders’ engagement in Masaka, Ezaga revealed that despite obtaining customer records from the affected banks, discrepancies between account numbers and contact information have frustrated the verification process.
He noted that although the Fund was prepared to pay all protected depositors within one month of the liquidation, up to 5% of the affected customers have neither placed their claims nor been located by verification teams.
Ezaga appealed to depositors to regularly update their contact details with financial institutions to avoid similar challenges in the future, warning that outdated information complicates payouts and negatively impacts the economy.
He further explained that some of the unresponsive clients are suspected to have had very small account balances at the time the banks were closed, which may explain their indifference.
Nevertheless, he emphasized that if all the held money was claimed and spent, it would make a significant economic contribution.
Under the Financial Institutions Act, the Central Bank has the authority to appoint DPF as receiver or liquidator of a financial institution when necessary.
The DPF is financed by regulated financial institutions, which are required to pay annual premiums of at least 0.2% of their average deposit liabilities from the previous financial year.
These premiums are securely managed and prudently invested to ensure depositors are protected in case of institutional failures.
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