Analysis of Bank of Uganda Regulatory and Legal Framework Governing Commercial Banks in Uganda.

Table of Contents

DECLARATION ............................................................................................................................. i

APPROVAL .................................................................................................................................. ii

DEDICATION ............................................................................................................................... iii

ACKNOWLEGEMENT ............................................................................................................. iv

LIST OF ACRONYMS ................................................................................................................... v

LIST OF STATUTES .................................................................................................................... vi

LIST OF AUTHORITIES (CASE LAWS) .................................................................................. vii

OBJECTIVES .............................................................................................................................. viii

ABSRACT .................................................................................................................................... xii

CHAPTER ONE .............................................................................................................................. I

GENERAL INTRODUCTION ....................................................................................................... 1

1.0 INTRODUCTION ..................................................................................................................... 1

1.1 HISTORY OF BANKING ........................................................................................................ 2

l.l.IPeriod before Independence to 1980s . ................................................................................. 3

1.1.2 The Period after 1980s to Present. .................................................................................... 5

1.1.3 Regulatory Changes from 20 I 0 to Present. ............................................................................ 6

1.1.4 Background of Bank of Uganda ............................................................................................. 8

1.2 STATEMENT OF THE PROBLEM ......................................................................................... 9

1.3 OBJECTIVES OF THE STUDY ............................................................................................. IO

1.4 JUSTIFICATION FOR TI-lE RESEARCI-1 ............................................................................. 10

1.5 METHODOLOGY .................................................................................................................. 11

1.6 1-IYPOTHESIS ......................................................................................................................... 12

1.7 SCOPE OF THE STUDY ....................................................................................................... 12

1.8 SIGNIFICANCE OF TI-lE STUDY ....................................................................................... 13

ix

1.10 LITERATURE REVIEW ...................................................................................................... 13

CHAPTER TWO ................. .................. .............. .......................................................................... 16

THE LEGAL FRAMEWORK GOVERNING COMMERCIAL BANKS ................................... 16

2.0. EVOLUTION OF COMMERCIAL BANK LAWS ..................................... ......................... 16

2.1 THE -LAW RELATING TO COMMERCIAL BANKS IN UGANDA ................................. 17

2.1.1. The 1995 Constitution of Uganda ................................................................................. ....... 19

2.1.2 The Bills of Exchange Act Cap 68 .................................................................................. ..... 20

2.1.3 The Financial Institutions Act ................................. ............................................................. 22

2.1.4 The Bank of Uganda Act Cap.51 .................................................... ...................................... 24

2.2 CRITIQUE OF THE LEGAL FRAMEWORK ....................................................................... 25

CHAPTER THREE .... ................................................................................................................... 30

THE INSTITUTIONAL FRAMEWORK FOR THE MANAGEMENT OF COMMERCIAL

BANKS ........ ......... ................................. .............................. ......................... .............. ................... 30

3.1 THE BANK OF UGANDA .... ......................................... ........................................................ 30

3.2 THE UGANDA BANKERS INSTITUTE ............................................... ............................... 39

3.3 THE MINISTRY OF FINANCE ........ ..................... ................................................................ 41

3.4 COMMENTS AND ANALYSIS ............................................................................. ............... 43

CHAPTER FOUR .............................................................. ........................................................... 46

LEGAL AND NON-LEGAL CHALLENGES FACING BANKING INDUSTRY IN UGANDA

........ ............................. .. ......... ............... ... ........................ ............. ................................................ 46

4.0 LEGAL CHALLENGES .................... ......... ........... ................................ .. ........... .......... .......... 46

4.1 NONLEGAL CHALLENGES ......................................... ... ..................... ..................... .......... 53

4.2 Conclusions .................... .............................. ............................................................................ 55

CHAPTER FIV£ .... ..................................... ................................................................................. 57

GENERAL RECOMMENDATIONS .................. .. .......... ...... ... ......... .. ............. ......... ................ 51

5. 1 Recommendations ................................................................................................................ .. .. 57

X

BIBLIOGRAPHY ...................... .................................................................................................... 62