The government has initiated the payment process for depositors of the recently closed Mercantile Credit Bank Ltd. The Bank of Uganda placed the bank under liquidation, revoked its license, and ordered the winding up of its affairs, officially closing it on June 18, 2024.
In a public statement signed by Deputy Governor Michael Atingi-Ego, the central bank explained that the decision was made after determining that the continuation of Mercantile’s activities was detrimental to the interests of its depositors. Factors contributing to this decision included significant undercapitalization, poor corporate governance, and insolvency. The Bank of Uganda emphasized its commitment to protecting depositors’ interests and maintaining the stability of the financial sector.
The statement also advised borrowers of the bank to continue servicing their loans by paying at Bank of Uganda offices within 30 days. Additionally, anyone possessing property of Mercantile Credit Bank was instructed to deliver it to the Director of Financial Stability at the Bank of Uganda. All inquiries were directed to the same officer.
At a media briefing on June 24, Dr. Julia Olima Oyet, Chief Executive Officer of the Deposit Protection Fund of Uganda (DPF), announced that the fund began paying individual depositors with balances of Shs 1 million or less via mobile money on June 22. Oyet stressed that all categories of protected depositors would have their payments consider any outstanding debts or other obligations to the bank. Deposits above the protected limit of Shs 10 million will be handled by the Bank of Uganda, not the DPF.
“For depositors with less than Shs 1 million, the name on your national identification card must perfectly match with your mobile money number,” Oyet emphasized.
Payments to individual account holders with balances between Shs 1 million and Shs 10 million will commence on July 1, 2024. This will be done through Stanbic Bank’s Lugogo branch, and depositors will receive an SMS notification. Depositors must present a valid and original national identity card.
Company, Joint, and Trust Accounts
Payments to holders of company, joint, and trust accounts will begin on July 8. These depositors must present relevant documents to the DPF offices at AHA Towers, Plot 7 Lourdel Road, Nakasero, Kampala.
Company account holders need to provide a letter confirming the account name and the names and signatures of account signatories, a registered board resolution indicating the bank account for the payment, a certificate of incorporation, the company’s location, the memorandum and articles of association, and photocopies of valid original national IDs of the signatories. The Uganda Registration Services Bureau is expected to certify certain documents.
