BoU Revokes License of Mercantile Credit Bank Ltd


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In a decisive move to protect depositor interests, the Bank of Uganda (BoU) has revoked the license of Mercantile Credit Bank Ltd, a Tier II financial institution, citing critical issues of poor governance and undercapitalization.

This action, taken under Sections 99 and 17(b) and (f) of the Financial Institutions Act 2004, mandates the company to wind up its operations immediately.

Deputy Governor’s Statement

Dr. Michael Atingi-Ego, Deputy Governor of the BoU, announced the revocation, emphasizing the bank’s ongoing risk to depositors due to its financial instability.

“This action is necessary because the Bank of Uganda has determined that the continuation of Mercantile Credit Bank Ltd’s activities is detrimental to the interests of its depositors due to the institution’s failure to resolve its significant undercapitalization, poor corporate governance, and insolvency,” stated Dr. Atingi-Ego.

Reasons for Revocation

The revocation follows Mercantile Credit Bank Ltd’s persistent failure to meet required capitalization levels and maintain robust corporate governance standards. These deficiencies have rendered the bank unable to protect customer deposits adequately, prompting the BoU to intervene.

Next Steps for Depositors and Creditors

In collaboration with the Deposit Protection Fund (DPF), the BoU will soon announce the procedures for reimbursing depositors. The DPF insures deposits up to 100,000 shillings, which it will manage, while the BoU will oversee the reimbursement of amounts exceeding this limit.

Dr. Atingi-Ego assured that, “In the interests of the customers, BoU, together with the Deposit Protection Fund (DPF), will shortly inform all depositors of the arrangements to pay them back.”

Depositors with uninsured portions of their funds will have their cases handled under Section 105 of the Financial Institutions Act 2004, as Amended. Additionally, all creditors are requested to submit their claims to the office of the Director of Financial Stability at BoU within 30 days from the announcement date. Borrowers are instructed to settle their outstanding loan balances at BoU headquarters or its branches.

Impact on the Financial Sector

This incident underscores the stringent regulatory oversight exercised by the BoU to safeguard financial stability and depositor interests. The revocation of Mercantile Credit Bank Ltd’s license serves as a stern reminder to other financial institutions about the critical importance of maintaining adequate capitalization and strong governance structures.


The Bank of Uganda’s proactive measures reflect its commitment to maintaining a secure and stable banking environment. Affected depositors and creditors are advised to stay informed through official BoU communications regarding the specific procedures for claim submissions and repayments.

For further information and updates, stakeholders can visit the Bank of Uganda’s official website or contact their customer service hotlines.

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