What next for Uganda’s undercapitalised banks? As of 31st December 2022, out of the 25 banks, 10 banks didn’t meet the thresholds on share capital while another 10 did not meet the thresholds on core capital. Seven (7) banks did not meet both. They have until the end of June 2023 to beat the deadline for the first phase of recapitalisation. They have 4 options⏤comply, downgrade their license, find a buyer or exit the market.
Dr. Tumubweinee Twinemanzi, PhD, the Bank of Uganda Executive Director is having hard conversations with undercapitalised banks.
On the 16th of November 2022, the Financial Institutions (Revision of Minimum Capital Requirements) Instrument 2022 was signed into law by Uganda’s Minister of Finance, Planning and Economic Development (MFPED), Hon. Matia Kasaija. The instrument increased the minimum capital requirements for banks by 6 times or 500% from UGX25 billion (USD 6.7 million) to UGX150 billion (approx USD
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