Over the years, closing banks in Uganda has stirred much debate, with more than nine banks shut down under controversial circumstances. This issue was brought to light during the COSASE probe, led by Hon. Abdu Katuntu, which faulted the Bank of Uganda on procedural missteps. Notably, banks like Crane Bank and Greenland Bank were at the center of these controversies. Here, we explore the notable closed banks in Uganda, examining their history and reasons for closure.
1. Mercantile Credit Bank Ltd. (MCB)
Founded:1981 | Closed:2024
Mercantile Credit Bank Ltd. (MCB) was a private financial institution in Uganda, classified as a Tier II credit institution. It was established in 1981 and began operations in 1986. Unfortunately, on June 18, 2024, the Bank of Uganda revoked MCB’s license due to undercapitalization and failure to adhere to the terms of its license.
2. National Bank of Commerce (Uganda)
Founded: 1991 | Closed: 2012
The National Bank of Commerce (NBCU) was one of the closed banks in Uganda with a unique mission. Initially established in 1991 as the Kigezi Bank of Commerce, the institution aimed to provide affordable banking services to the Kigezi community. However, on 27 September 2012, the Bank of Uganda revoked NBCU’s banking license, adding it to the list of closed banks in Uganda.
3. Global Trust Bank (U) Limited
Founded: 2008 | Closed: 2014
Global Trust Bank (Uganda) Limited (GTBU) began operations in 2008, but like many other closed banks in Uganda, it met a swift end. On 25 July 2014, the Bank of Uganda closed GTBU, transferring some of its assets and liabilities to DFCU Bank. This closure marked another instance where a financial institution could not withstand the competitive and regulatory environment.
4. Greenland Bank
Founded: 1990 | Closed: 1999
Among the more prominent closed banks in Uganda, Greenland Bank holds a significant place. Founded by Dr. Suleiman Kiggundu, the bank grew to become Uganda’s largest indigenous private commercial bank. Unfortunately, internal challenges led to its closure on 1 April 1999.
ALSO READ: Best Banks in Uganda: Your Guide to Top Financial Services
5. Teefe Trust Bank
Closed: 1993
Teefe Trust Bank was one of the earliest banks that were shut down in Uganda. Its closure in February 1993 resulted from insider lending and bad debt accumulation, which hindered its ability to operate effectively. This bank’s downfall highlights the challenges that some Ugandan banks have faced in maintaining financial health.
6. Co-operative Bank Limited
Closed: 1999
Established in 1963, the Co-operative Bank became one of the closed banks in Uganda due to alleged mismanagement and corruption. Despite a transformation in 1997, the bank was shut down on 19 May 1999 by the Bank of Uganda, adding to the growing list of closed banks in Uganda.
7. International Credit Bank Limited
Closed: 1998
In 1998, the International Credit Bank Limited joined the ranks of closed banks in Uganda. Bank of Uganda closed the institution on 18 September 1998 due to violations of the Financial Institutions Statute, 1993. This was another example of a financial institution unable to meet regulatory requirements.
8. Crane Bank
Founded: 1995 | Closed: 2016
Crane Bank, once a promising Ugandan-owned bank, was one of the more high-profile closed banks in Uganda. On 20 October 2016, the Bank of Uganda placed the institution under statutory management, and by 27 January 2017, DFCU took over its operations. The closure was due to insolvency issues, with the bank’s liabilities exceeding its assets.
9. Uganda Commercial Bank
Founded: 1956 | Closed: 2001
Once Uganda’s largest government-owned bank, Uganda Commercial Bank Ltd (UCB) was privatized and merged into Stanbic Bank Uganda Limited in 2001. Though the institution was not closed due to insolvency, its absorption into another bank marked the end of one of the oldest banks in Uganda.
The Bottom line
The closing of banks in Uganda has had significant impacts on the country’s financial sector. From mismanagement and insider lending to regulatory challenges, the reasons behind their closure offer valuable lessons. By looking at the history of these institutions, we can better understand the complexities of the banking environment in Uganda.