International Credit Bank Wants Its Operating License Reinstated

  • Posted on: 5 February 2019
  • By: sanyu-fm-news

The former MD of International Credit Bank ( ICB) Patrick Katto has demanded that the bank's operating  license be reinstated.

Katto made the appeal while meeting with MPs on the COSASE which is investigating the irregular closure of commercial banks by the central bank.

The BOU closed the bank on the 18th of September 1998 due to poor liquidity and insolvency.

Although Katto admitted that the bank had insolvency problems due to bad loans on which borrowers defaulted he stated that the depositors interests were never at risk.

He insisted there was no run on the bank and there were several avenues through which the situation could have been rectified. He blamed the closure of the bank on personal interests by some officials in the central bank.

In his statement he had earlier noted that there was bad blood and resistance between the BOU and ICB right from the start.

Katto also questioned what he termed as the dubious handling of the bank's loan portfolio which was lumped together with the loan portfolios of Greenland and Co-op bank.

He raised suspicion about a 2.7bn expended by the BOU for the liquidation of ICB, he told MPs that there was need to break down this figure item by item since it was suspicious.

In his forensic audit the auditor general noted that BOU did not maintain full ledgers of the closed banks and so he could not determine the total liquidation costs.

He also pointed out that the depositors protection fund in the BOU paid put 279m shs to depositors but 808m was recovered from the bank's assets.

Katto noted that he had no figure in mind for compensation following the irregular closure and handling of the liquidation process he said it would be selfish to seek compensation but stated that his wish was to have the bank's licence reinstated since the major objective of opening the bank was to serve the public and contribute to national development.