Bank of Uganda requires a commercial bank to have minimum capital of Shs25b to operate in Uganda In his keynote address themed: “The contribution of accountancy to the health and stability of the banking sector”, during the 22 annual seminar of Institute of Public Accountants of Uganda, BoU deputy governor Louis Kasekende said banks are unique among commercial enterprises in respect of their high levels of leverage.
“In aggregate, Ugandan banks have total assets which are nearly six times larger than their capital base. Banks’ assets are, therefore, funded predominantly with borrowed resources, of which customer deposits comprise more than 80 per cent,” he said last Wednesday at Imperial Resort Beach Entebbe. Banks’ total shareholders’ capital increased in nominal terms from Shs3.3 trillion to Shs3.7 trillion between June 2015 and June 2016.
Dr Kasekende said: “Trust and confidence in the sound management of the banks rests on three complementary pillars; the corporate governance of banks, their external audit and public regulation and supervision. In all three pillars, accounting skills and expertise play an essential role.” Dr Kasekende further stated that the main responsibility of ensuring good corporate governance in a bank lies with its BoD and that all directors must be approved by the BoU.
“They must be of the highest integrity and have professional expertise relevant to banking, such as accounting qualifications. Each director is individually responsible for the conduct of the bank and can be held responsible for any misconduct by the bank,” he said.