In a significant move aimed at strategic repositioning, the Bank of Uganda (BoU) has announced the authorization for three commercial banks to transition from Tier I Commercial Bank Licenses to Tier II Credit Institution Licenses, effective July 1, 2024.
The commercial banks undergoing this transition are ABC Capital Bank (U) Limited, Guaranty Trust Bank (U) Limited, and Opportunity Bank Limited. This transition is part of a broader strategic shift adopted by the respective boards of directors of these institutions to better serve their core customer base.
The transition period for these banks will commence from April 1, 2024, and will span three months, ending on June 30, 2024. During this time, the banks will undertake necessary arrangements to phase out products and processes that require a Tier I License. This transition aims to ensure a seamless service transition for customers while mitigating any potential disruptions to the stability of the financial sector.
It’s noteworthy that these institutions are adequately capitalized and meet the minimum capital requirements for a Tier II License. This indicates a strong foundation for their transition into credit institutions. Bank of Uganda has reassured the public of its unwavering commitment to ensuring the stability of the financial system. This transition reflects a strategic evolution within the banking sector, aimed at enhancing the effectiveness and responsiveness of these institutions to the needs of their customers and the broader market.
Michael Atingi-Ego, Deputy Governor of the Bank of Uganda, emphasized the significance of this transition and the commitment of the central bank to oversee a smooth and successful process. As these commercial banks transition into credit institutions, they embark on a new chapter poised to bring greater value and innovation to the financial landscape of Uganda.
