Just a few Crane Bank branches upcountry operated normally today as Bank of Uganda announced the take-over of the countrys third largest bank.Today afternoon, the Bank of Uganda governor Prof.Emanuel Tumusiime Mutebile took control of the bank saying the continuation of Crane Bank activities in the current form is detrimental to the interests of its depositors.
Just a few Crane Bank branches upcountry operated normally today as Bank of Uganda announced the take-over of the country's third largest bank.
After months of speculation on the status of the bank, BOU announced Crane Bank was significantly under-capitalized.
"This is to inform you that the Bank of Uganda has with effect from today, 20th October 2016, pursuant to Sections 87 (3), 88(1) (a) & (b) of the Financial Institutions Act 2004, taken over Crane Bank Ltd," Governor Emmanuel Tumusiime-Mutebile said in a brief statement.
In a press conference thereafter, Mutebile explained that the "action was taken upon determination that Crane Bank Limited is a significantly under-capitalized institution and this poses systemic risks to the stability of the financial systems."
Mutebile added that the continuation of Crane Bank activities in the current form is detrimental to the interests of its depositors. He adds that "Accordingly, Bank of Uganda has appointed a statutory manager of the affairs of the Bank and suspended its Board of Directors."
In some of the branches, clients walked in and out of the banking hall without any visible sign of a takeover, apart from police deployment alongside private security guards outside the bank.
At Mbarara branch, Jonathan Ayebare bank customer told our reporter that he had planned to withdraw his money but cancelled the plan after being informed by a friend that the takeover would not affect the savings of the clients.
Simuka Phenekansi, another customer said he had just banked some money on his account and was told that the bank will continue to operate normally.
Juliet Tumusiime said she withdrew all the 500,000 shillings on her account.
She says that she would like to first study the situation and know the way foward.
A staff member of crane bank who talked to URN on condition of anonymity says that most of the clients have in the past one month been withdrawing their money to zero balance.
Crane bank Manager for Mbarara Branch Chris Namutt said that the takeover by the central bank will not affect their work. He however declined to reveal more details concerning the reaction of the clients.
In Masaka the queue is slowly building up with depositor's line up both in the banking hall at the automated teller machines to withdraw their savings with the bank. Mahdi Ssenkabirwa, a resident of Masaka says he has withdrawn all his money for fear that the Bank may eventually close down. He says the takeover by Central Bank means there is a problem.
But only one out of 15 tellers inside the bank is operating. The foreign exchange counter is also closed. The attendant told Uganda Radio Network that she could not give out any money.
However, the branch management of the bank said the Bank is operating normally.
In Gulu, business progressed normally at the bank. By the time of filing this report, a group of bankers from Kampala had arrived at the branch. The bank's clients however seemed ignorant about the changes.
Thomas Ojok, a client was surprised at the news but hastened to add that he is grateful to know that the Central Bank is working hard to protect customers. Private security has been deployed alongside armed police personnel at the branch.
In Soroti, the Branch located along Mbale road, is now guarded by six armed police officers and four private security guards, a rather unusual scene at the facility.
A front desk manager at the Branch told Uganda Radio Network that the branch recorded the highest volume of withdrawals today, based on speculation about the status of the bank. He however says that there is no need for panic.
In Hoima, only one teller was available out of the usual eight. By the time of filing the report there were only two staff inside the bank which at the moment is guarded by Two police officers and two private security guards.
The construction site of the branch in Masindi has also been deserted.
In Luweero, Business was normal. By the time URN reporter visited the bank at 4:30pm, only two clients were making withdraws from the tellers. There was no client at the ATM.
One of the clients told URN that he was not yet aware of the takeover by BOU. The branch still carries an earlier disclaimer at the entrance dismissing the pending closure of the bank. However unlike before the bank is now guarded by two police officers deployed at the entrance. Before the takeover, the bank was only guarded by private guards.
Crane bank opened up Luweero branch in 2015 but was still struggling to attract clients by the time of the takeover.