Finance Trust Bank has outlined the next phase of its operations after receiving approval from the Bank of Uganda to continue business under a Tier II Credit Institution licence, effective April 1, 2026, raising fresh questions about the lender’s strategic direction and what the transition means for its customers and Uganda’s wider banking sector.
The announcement was made in a customer update and press release issued on January 29, in which the Board and Management of Finance Trust Bank said the institution will transition from a Tier I commercial bank licence to a Tier II credit institution platform following the central bank’s issuance of a new licence.
The bank reassured customers that the transition will not disrupt access to banking services, noting that all savings accounts in both Uganda shillings and US dollars, fixed deposits, loans, trade guarantee facilities, branches, and digital channels will continue operating normally.
Finance Trust also clarified that current cheque accounts will be seamlessly transitioned into business based structured accounts, with no change to balances, transaction history, or account statements.
Existing overdrafts will continue running to maturity, after which customers will be supported individually to ensure continued access to appropriate financing solutions.
The lender emphasized that no action is required from customers at this stage, and that any clients requiring individual engagement will be contacted directly by the bank.
“Customer funds remain safe and secure, and there is no disruption to services,” the bank said in its update.
The move places Finance Trust Bank among a growing list of institutions adjusting their licence status in response to Uganda’s stricter regulatory environment, particularly the sharp increase in minimum capital requirements for Tier I commercial banks.
Speaking to CEO East Africa Magazine, Percy Paul Lubega, Head of Marketing and Corporate Affairs at Finance Trust Bank, said the transition provides the institution with greater flexibility to focus on its core market segments, including women entrepreneurs and small and medium sized enterprises.
BoU has also published a Frequently Asked Questions (FAQs) notice intended to reassure customers, stakeholders, and the wider financial sector that the change is strategic rather than a sign of distress.
What the transition means
The Bank of Uganda explained that the shift reflects a change in licence category under Uganda’s financial sector regulatory framework.
While Tier I commercial banks provide a broad range of services, Tier II credit institutions operate with a more focused scope, concentrating mainly on deposit-taking and lending activities.
Both licence categories remain regulated
The regulator clarified that both commercial banks and credit institutions are licensed, regulated, and supervised under the Financial Institutions Act, Cap. 57.
Institutions in either category must meet capital requirements, consumer protection standards, and reporting obligations appropriate to their licence type.
Services Finance Trust Bank will continue providing
Under the Tier II credit institution licence, Finance Trust Bank will continue offering a range of financial services. These include accepting customer deposits such as savings and fixed deposit accounts, providing loans and credit facilities to individuals, SMEs, and other customers, and conducting foreign exchange services limited to buying and selling foreign currencies.
The bank will also continue issuing and administering means of payment, offering money transmission and remittance services, and providing savings and lending products tailored to specific customer segments.
The central bank noted that Tier II institutions are deposit-taking financial institutions operating under a focused licence aligned to their business model.
Finance Trust Bank has also indicated it will continue providing trade finance products such as bid bonds, advance payment guarantees and any other associated trade finance products.
Services that may no longer be offered
However, the Bank of Uganda highlighted that after the transition, Finance Trust Bank will no longer provide certain services that are restricted to Tier I commercial banks.
Equity Bank Rwanda Hit by Fraud, Months After Group CEO, James Mwangi’s Integrity CrackdownThese may include certain current account services, issuing new overdrafts although existing overdrafts will remain until maturity, participation in the interbank market on maturity placements with counterparties, clearing instruments and processing wire transfers through third parties.
The notice added that customers affected by the discontinuation of any specific service will be informed directly by the bank.
Deposits and Accounts remain accessible
Customers were assured that their deposits remain protected and that they will continue accessing their accounts without interruption.
“Customer deposits remain safe, and customers will continue to access their accounts. The transition has been structured to ensure continuity of core banking services, with minimal disruption,” the notice stated.
In most cases, customers’ account numbers and details will remain unchanged, with advance communication provided if any changes are required.
Existing loans and contracts still valid
The Bank of Uganda further confirmed that all existing legal agreements including loan contracts, deposit agreements, and other customer arrangements will remain binding under their original terms.
“All existing customer contracts…will continue to be honoured according to their agreed terms,” the regulator said.
Interest rates not automatically changing
The central bank clarified that interest rates on loans and deposits will remain subject to normal market conditions and contractual requirements.
Customers will be notified of any changes in line with regulatory and contractual obligations.
No need to close Accounts or worry about jobs
Customers will not be required to close their accounts as banking services will continue without interruption.
Similarly, the institution will continue operating with its professional staff, and any operational changes will be managed to ensure smooth service delivery.
Branch operations will also remain open, with customers to be informed in advance should there be any adjustments to branch locations or services.
Three-month transition period
A three-month transition period running from January 1 to March 31, 2026, has been set aside to allow the bank to phase out or adjust services requiring a commercial bank licence, update internal processes and systems, communicate clearly with customers, and ensure a smooth transition with minimal inconvenience.
Central Bank reassures public on stability
The Bank of Uganda stressed that Finance Trust Bank remains adequately capitalised and meets the minimum regulatory requirements for Tier II credit institutions.
The regulator also dismissed speculation that the transition indicates financial difficulty.
“The transition is the result of strategic repositioning, not financial distress. FTB remains compliant with regulatory requirements applicable to Tier II Credit Institutions,” the notice said.
Where Customers Can Get More Information
Customers have been encouraged to seek clarification through visiting Finance Trust Bank branches, contacting the bank’s customer care services, and checking the bank’s official website and social media platforms.
