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Bank Governance and Compliance in Uganda

Roles of Directors

Directors play a crucial role in bank governance, with four key responsibilities:

  • Providing Strategic Direction: Setting the overall direction and vision for the bank.
  • Policy Formulation: Developing policies that guide the bank’s operations and decision-making processes.
  • Decision-Making: Making informed decisions that impact the bank’s performance and reputation.
  • Oversight of Executive Management: Ensuring that executive management is accountable for their actions and decisions.

As fiduciaries, directors are accountable to shareholders and must ensure good corporate governance and business performance.

Remuneration Requirements

While there are no specific remuneration requirements prescribed by law or the Bank of Uganda (BOU), banks determine remuneration solely through their compensation committees. These committees ensure that remuneration is consistent with the institution’s culture, objectives, strategy, and control environment.

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Requirements

The primary legislation regulating AML/CFT in Uganda is the Anti-Money Laundering Act (AMLA) as amended. Banks must comply with the following requirements:

  • Registration: Register with the Financial Intelligence Authority (FIA) as accountable persons.
  • Customer Identification and Verification: Identify and verify customer identities through due diligence measures, including continuous monitoring throughout the existence of the relationship.
  • Risk Assessment Measures: Implement risk assessment measures to identify, assess, detect, and monitor money laundering and terrorism financing risks.
  • Record-Keeping: Maintain records on customer identification information, account files, and business correspondence for at least 10 years.
  • Cash Transaction Reporting: Record and report cash transactions exceeding UGX20 million.
  • Suspicious Transaction Reporting: Report suspicious transactions to the FIA.

Other Requirements

Banks must also comply with the following requirements:

  • Politically Exposed Persons (PEPs): Require written approval from senior management before establishing a business relationship with PEPs.
  • Periodic AML Audits: Conduct periodic AML audits to assess the efficiency of their anti-money laundering measures.
  • Risk Assessment Reports and Compliance Reports: Submit risk assessment reports, AML compliance reports, and product risk assessments timely.