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Bank of Uganda okays change in bank operating hours, closure on weekends
Kampala, Uganda | THE INDEPENDENT | The central bank (BOU) has agreed to a request by the Uganda Bankers Association for a change in operating hours to cope with the challenges brought by the COVID-19 pandemic.
“On account of the operating challenges posed by the COVID 19 crisis, Bank of Uganda hereby grants a ‘no objection’ to all regulated financial institutions for amendment of their branch operating hours to 9am-3pm on weekdays and for branch closure on Saturday and Sundays,” said a statement signed by Tumubwinee Twinemanzi, the Bank of Uganda (BOU) executive director for supervision
BOU has also ordered banks to defer payments of bonuses and dividends to remain with enough capital to absorb losses that may come as a result of Covid-19. This is contained in a March 24, 2020, circular to all chief executives of commercial banks, credit institutions, and microfinance deposit-taking institutions.
Signed by Tumubwinee Twinemanzi, the executive director for supervision, the circular says “banks must preserve their capital to support the real economy and absorb losses.” He says this should take priority over discretionary distributions like dividends and bonus payments.
He wrote that “therefore, payment of all discretionary distributions is deferred until further notice or until explicit authorization is given by Bank of Uganda.”
Uganda has so far confirmed 18 cases of Covid-19 with health ministry running more tests. President Yoweri Museveni has suspended public transport for 14 days and ordered the closure of such places as churches, bars, and schools.
With the partial shutdown, many businesses have shut their doors for now including tour companies, hotels and several other organisations. With businesses on a standstill, experts believe banks as financiers are expected to make losses as people lag behind in their loan repayments.
BOU says banks are expected to vigorously test their individual business continuity plans for adequacy with securing the safety of customers and staff.
The Central Bank adds that face-to-face meetings with the banks’ board members, senior management and or their external auditors are suspended at this time. Banks will be required to conduct such meetings remotely.
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