Uganda Bankers Association Proposes Harsh Penalties for Financial Fraudsters: Response to Surge incyber Crimes

Increase in Financial Fraud Cases and Losses

According to the latest report from the Financial Intelligence Authority (FIA), released in June 2022, financial fraud is becoming more sophisticated. Cybercrimes now account for over half of the high-value cases under investigation, leading to significant annual losses.

Uganda Bankers’ Association’s (UBA) Response

In response to this surge, the Uganda Bankers’ Association (UBA), an umbrella body representing financial institutions in the country, has called for stiffer penalties against individuals involved in financial fraud.

Legal Framework Review

UBA chairperson, Sarah Arapta, announced that her organization had engaged a legal firm to review the legal framework for the prevention, deterrence, and remediation of fraud within the sector. If approved, this framework would see convicts and blacklisted individuals barred from having accounts or transacting business with any financial institution in Uganda. international and cross-border sanctions would also be imposed.

The Banking Industry Guidelines on Mitigation of Fraud (BIGF)

The first framework, The Banking Industry Guidelines on Mitigation of Fraud (BIGF), aims to address the issue of fraud by:

1. Creating comprehensive guidelines on incident reporting and information sharing
2. Formulating a strategic roadmap to combat fraudulent activities
3. Maintaining two categories of lists—the Grey list for fraud suspects and the Blacklist for confirmed or convicted fraudsters.

The Revised Industry Code of Conduct and Ethics (COC)

The second framework, the Revised Industry Code of Conduct and Ethics (COC), encompasses professionalism, ethics, and responsible conduct for all staff of UBA member institutions and the secretariat. It also includes punitive measures against banking staff who breach confidentiality obligations or collude with fraudsters to compromise systems.

Importance of Timely Launch of Frameworks

The Deputy Governor of the Bank of Uganda, Michael Atingi-Ego, emphasized the importance of the timely launch of these frameworks as the banking industry faces the growing threat of increasingly complex frauds driven by technological advancements.

“The launch of these two documents is a critical stepping stone towards strengthening the bedrock of trust and confidence that underpins our financial institutions,” Atingi-Ego stated.

Consequences of Fraudulent Activities

Wilbrod Owor, UBA’s executive director, emphasized the need for increased collaboration among stakeholders to combat financial fraud. He described it as a sophisticated and strategic business that requires substantial investment.

“Financial fraud is organized, planned, and requires long-term investment. To keep up, we need to run faster,” Owor said.

UBA’s Commitment to Combating Fraud

The launch of these two frameworks marks UBA’s commitment to combating fraud and fostering a safer, trusted financial industry.