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Kampala, Uganda | THE INDEPENDENT | Uganda’s central bank hopes to strengthen the country’s financial sector by leveraging on the revised minimum capital requirements.
The Bank of Uganda said in a statement on July 06 that it is confident that the attainment and maintenance of the revised minimum capital by financial institutions, will promote a strong, stable, and sustainable financial sector.
Last year, Finance Minister, Matia Kasaija, signed a statutory instrument increasing minimum capital for commercial banks by 500 per cent from Shs 25billion to Shs 150billion by June 30, 2024.
BoU said the majority of financial institutions including those deemed large and critical to the smooth functioning of the financial system have since complied with the revised capital requirements of Shs 120bn as of the end of June.30, 2023.
“The remaining financial institutions had put in place credible capital restoration plans whose implementation was significantly advanced, and on course to achieve complete compliance with the revised capital requirement within agreed timelines,” BoU said.
The bank’s supervisor, however, did not divulge any information about the lenders that are yet to meet the revised minimum capital requirements.
Several commercial banks have since raised their minimum capital requirements through various models including share sale.
For instance, the Bank of Baroda got the nod from the Capital Markets Authority in May this year to go ahead with the bonus issue to raise capital to meet the new central bank capital requirement.
The Uganda Securities Exchange approved the lender to list additional 12.5 billion ordinary shares at Shs 10 each, translating into Shs 125 billion.
Top Finance Bank Uganda was acquired by Salaam African Bank (SAB), a financial firm based in Djibouti after the original investors reportedly failed to raise capital while Orient Bank was acquired by regional lender, I&M Group.
