Consultative Meeting on Proposed Increase in Paid-Up Capital Requirements for Commercial Banks, Credit Institutions and Micro Deposit Taking Institutions

BANK OF UGANDA

OFFICE OF
THE EXECUTIVE DIRECTOR
SUPERVISION

EDS.306.2

August 20, 2021

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Circular to all Chief Executives of Commercial Banks, Credit Institutions and Micro Deposit Taking Institutions

Consultative Meeting on Proposed Increase in Paid Up Capital Requirement of Commercial Banks, Credit Institutions and Micro Deposit Taking Institutions

In accordance with Section 26(5) of the Financial Institutions Act 2004 and Section 15 (3) of the Micro Deposit Taking Institutions Act 2003, Bank of Uganda (BOU) intends to increase the minimum paid-up capital requirements of Commercial Banks, Credit Institutions (CIs) and Microfinance Deposit Taking Institutions (MDIs).

Under the current legal framework, the paid-up capital for Commercial Banks stands at USh.25.0 billion, last revised in 2010, Shs.1.0 billion for Credit Institutions and Shs.500 million for MDIs last revised in 2004 and 2003, respectively. Consequently, the increase in paid-up capital is long overdue and is intended to match the dynamism in the economy, incentivize shareholder commitment, enable institutions to withstand shocks and to converge with regional peers among whom Uganda effectively has the lowest paid-up capital. Therefore, the proposed increase in paid-up capital requirements is as follows:

	Current	Proposed
Commercial banks	USh.25.0 billion	USh.150.0 billion
Credit Institutions	USh.1.0 billion	USh.25.0 billion
MDIs	USh.0.5 billion	USh.10.0 billion

Bank of Uganda is currently undertaking consultations with relevant stakeholders on the proposed increment. Accordingly, this is to invite you to a meeting scheduled for Thursday 26th August 2021 at 11.00a.m. via Microsoft Teams to discuss this matter. Kindly forward the names of the persons who will be attending the meeting to Mrs. Jacqueline P.N. Kigonya on jnansamba@bou.or.ug.

[Signature]

Tumubweinee Twinemanzi (Dr.)
Executive Director Supervision
Copy: Director Commercial Banking
Director NBFI
Director Financial Stability

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