Former Crane Bank owner Sudhir (L) and his son Rajiv at the Commercial court in Kampala in 2019 The Central Bank of Uganda has placed Crane Bank Limited (CBL) under liquidation and ordered the winding up of it’s affairs, Chimp Corps report.
Liquidation is the process of permanently closing a bank and its branches, selling off any assets and using the proceeds to settle as many of the bank’s remaining liabilities as possible.
The development means Crane Bank will never be revived as its previous owners hoped.
“In exercise of it’s powers under section 99(1) and 2 of the Financial Institutions Act, 2004, BOU (Bank of Uganda) has now placed CBL (Crane Bank Limited) under liquidation and ordered the winding up of it’s affairs,” said Governor Emmanuel Tumusiime-Mutebile in a statement on Friday.
“All borrowers of CBL whose loans were transferred to DFCU Bank under the purchase of assets and assumption of liabilities agreement between CBL (in receivership) and DFCU Bank Limited, must continue to service their loan obligations with DFCU Bank,” he added.
The Central Bank took over management of Crane Bank on October 20, 2016 and subsequently progressed it into receivership on January 24, 2017.
After the BoU had intervened in Crane Bank and taken it over in October 2016, an inventory of its assets and liabilities was commissioned and carried out by a reputable accounting firm.
This inventory, according to BoU, found that Crane Bank was “massively insolvent, with core capital of negative Shs. 240 billion, as a result of mismanagement and fraud.”
The bank was owned by businessman Sudhir Rupaleria, who doubles as Nepal’s Honorary Consul to Uganda, and his cronies.
Mutebile said then the notion that this bank “could have been rehabilitated by its owners – the same people who were responsible for its failure – if only the BoU had provided more liquidity support and allowed the owners to remain in control, is not tenable.”
In a statement on Friday, Mutebile said “all borrowers of Crane Bank whose loans were not transferred to DFCU Bank, must service their loans by paying into the designated collection accounts at Bank of Uganda.”Furthermore, the Governor stressed that Crane Bank borrowers whose loans were not transferred to DFCU Bank, can access a statement of their indebtedness from the office of the Director Commerical Banking at Bank of Uganda headquarters.Crane Bank, he said, will be notified of the procedure for presentation of their claims to the liquidator.The intervention […]