Property mogul Sudhir Ruparelia did little to save his bank- Crane Bank Ltd despite having a number of properties to his name, Matia Kasaija, the Minister of Finance, Planning and Economic Development has claimed.
Appearing before the Committee on Commissions, Statutory Authorities and State Enterprises (COSASE) today where he had been summoned to explain the source of the Shs478bn that the Central Bank injected into Crane Bank as recapitalistion, Kasaija said he called Sudhir, requesting him to sell some of his buildings and recapitalize his bank, but he (Sudhir) rejected the request and told him boldly that he was fed up of Crane Bank.
He said he called the tycoon after BoU Governor Prof. Emmanuel Tumusiime-Mutebile informed him (Kasaija) about Crane Bank’s financial woes.
Kasaija said: “When the Governor brought to my attention of the problem Crane Bank had, I rang Sudhir; I said ‘Sudhir, I don’t want your bank to go under because when it goes under, it reflects very poorly on the economy. The [Central]Bank is telling me that your bank is undercapitalised, I know you own some properties here in town, would you mind to sell off some of those properties?’He said ‘no, Minister I am fed up, let the bank go. ‘I said please, can we save this bank’?”
Kasaija’s remarks followed concerns raised by MPs on failure by the Central Bank to bail out the locally owned banks, with their only decision being to close down the banks, despite some of them claiming having the interest of saving their institutions.
In a related development, the Minister also accused Bank of Uganda of doing little to save some of the defunct banks, after learning that despite some of the shareholders of the defunct banks showing interest in saving their institutions, this didn’t deter the Central Bank from closing the institutions.
“It is very unfortunate that there is a patient who is still bleeding and you as doctor give him poison to finish him off. It is really unfortunate if this incidence happened, I don’t want to condemn myself but I will condemn myself in the strongest term. I thought the best way to do things is to see if the bank has any chance to survive, then we do anything possible to make it survive,” Kasaija said.
The Minister’s remarks were in response to a concern raised by Legislators who detailed some of the confessions by the former shareholders of National Bank of Commerce (NBC) during their meeting with the Committee on Monday.
Mathew Rukukaire, former Chairman NBC Bank told the Committee that despite the harsh and unfair treatment that NBC suffered at the hands of some senior Bank of Uganda officials at the time of its abrupt closure, NBC capital stood at more than 97% of the minimum threshold of Shs10Bn.
Rukikaire told the Committee that Bank of Uganda shouldn’t have taken the drastic action of choosing closure because NBC wasn’t significantly undercapitalised but the central Bank should have applied some of the options available under the law like requiring NBC directors to provide capital restoration plan to meet the shortfall of the alleged Shs300M within 90-100 days as required by section 87(1) of the Financial Institutions Act 2004.