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Banking Regulations Compliance in Uganda: A Must for Financial Stability

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The Bank of Uganda has issued a regulation aimed at ensuring compliance with reporting requirements by all banks operating in the country. This regulation, which takes effect from December 31, 1993, is designed to help the Central Bank carry out its duties effectively and maintain monetary stability.

Objectives

The objectives of this regulation are three-fold:

  • To enable the Central Bank to gather accurate and timely financial data from banks
  • To monitor the financial condition of individual banks on a regular basis
  • To ensure that banks submit their returns accurately and in compliance with instructions provided by the Central Bank

Required Returns

Banks operating in Uganda are required to submit various returns to the Central Bank, including:

  • Credit extended to insiders
  • Credit extended to non-resident individuals and corporate bodies
  • Other related information

These returns must be submitted within 30 days of the end of each quarter.

Verification for Accuracy

The Central Bank has the power to inspect a bank’s records, books, and documents used in preparing the required returns. If a return is found to be inaccurate or misleading:

  • The bank will be required to amend or correct it and resubmit it to the Central Bank
  • External auditors are also responsible for verifying the accuracy of these returns and informing the Central Bank of their findings

Remedial Measures and Administrative Sanctions

The Central Bank may impose:

  • Fines on banks that fail to comply with this regulation
  • Remedial measures such as amending or correcting its returns
  • Administrative sanctions, including:
    • Prohibition from declaring and/or paying dividends
    • Suspension of establishment of new branches
    • Suspension of access to the Central Bank’s credit facilities

Effective Date

The regulation takes effect from December 31, 1993. All banks operating in Uganda are required to comply with these regulations forthwith. Failure to do so may result in administrative sanctions or fines being imposed by the Central Bank.