BANK OF UGANDA
Remarks
By
Louis Kasekende (PhD.),
Deputy Governor, Bank of Uganda
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At the Supervisory College of Standard Chartered Bank,
Africa Region
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Kampala; November 10, 2016
SPEECH BY THE DEPUTY GOVERNOR AT THE SUPERVISORY
COLLEGE OF STANDARD CHARTERED BANK, AFRICA REGION
HELD AT THE SPEKE RESORT HOTEL MUNYONYO ON
THURSDAY, NOVEMBER 10, 2016
Executive Director Supervision, Bank of Uganda
The Prudential Regulation Authority Officials,
The Host Supervisors of Standard Chartered Bank from the African Region,
Directors and Senior Management of Standard Chartered Bank from the
African region,
Staff of the Bank of Uganda
Distinguished Guests,
Ladies and Gentlemen,
Bank of Uganda is greatly honoured to have been given the opportunity to
host this supervisory college for Standard Chartered Bank, Africa Region in
conjunction with the Prudential Regulation Authority (PRA). I warmly
welcome you all to Uganda, the Pearl of Africa. I trust that during your short
stay here you will truly experience the warmth and hospitality of the
Ugandan people.
The decision regarding the venue for this college came to fruition as a result
of a deliberate and keen interest by the Prudential Regulation Authority
(PRA) to deepen their understanding on the role played by Standard
Chartered Bank in the African economies and risks associated with the
businesses. To this end, Bank of Uganda (BOU) graciously accepted to host
the first college when the Prudential Regulation Authority proposed the idea
of convening a supervisory college for subsidiaries of Standard Chartered
Bank in Africa.
I wish to highlight that Standard Chartered Bank Uganda (SCBU) has been
operating in Uganda for over 100 years, having opened for business in 1912.
The bank currently has eleven branches and 28 Automated Teller Machines
(ATMs) and is considered a Domestic Systemically Important Bank (D-SIB).
As at June 30, 2016, the bank commanded a market share of 11.58 percent,
11.42 percent and 12.00 percent in terms of total assets, total deposits and
total loans, respectively.
Standard Chartered Bank Uganda has greatly contributed to Uganda's
economy, both financially and in technological innovations in the Ugandan
ranked amongst Uganda's top
banking sector. It is twenty tax payers and has
won a number of awards including Employer of the Year 2013, Best in
Corporate Social Responsibility 2014 and Best Consumer Internet Bank
2013, amongst others.
As a leader in technological innovations in the banking industry, Standard
Charted Bank Uganda was the first bank to introduce ATMs in the country,
VISA Electron debit cards, toll free phone banking and other innovations. It
was also one of the first banks to be licensed to trade government securities
as a primary dealer and the first to offer derivative products in Uganda.
With these achievements in mind over the years and given the recent
amendments to the Financial Institutions Act, 2004, which allowed banks to
engage in Islamic banking, Agent banking and Bancassurance; enormous
in Uganda's formal
potential for innovation, growth and financial inclusion
financial sector remains.
In the African Region, Standard Chartered Bank has a strong foot print and
its existence in the region raises important aspects of cross border banking
relationships between home and host regulators. One important aspect I wish
to highlight is the resolution of cross border banking entities. I want to draw
your attention to the recent closure of a Kenyan bank, which had a subsidiary
in Uganda. The closure highlighted a few challenges in the winding up of
parent banks while the subsidiary remains operational. Consequently, to
ensure uninterrupted business continuity of the subsidiary at all times, Bank
of Uganda issued a directive to all commercial banks to install in-country
Primary Data Centers and Disaster Recovery Sites. We trust that SCBU is
fast tracking the implementation of the Data Center and Disaster Recovery
Site and that the Prudential Regulation Authority will strongly encourage
Standard Chartered Bank Plc. to ensure that its subsidiary fully complies with
this directive.
Turning to the purpose of today's agenda, Supervisory Colleges provide
avenues for enhancing information sharing among supervisors, facilitate
common understanding of risks in financial groups, promote a shared agenda
for addressing risks and vulnerabilities, contribute to improved crisis
preparedness and provide a platform for communicating key supervisory
messages among college members.
Addressing emerging vulnerabilities such as unintended consequences of
implementing global standards and rules like Anti-Money Laundering and
Anti-Terrorism financing mechanisms will require concerted information
sharing that such supervisory colleges can support.
However, these colleges are not a substitute for effective national supervision
nor should they undermine the legal and prudential responsibilities of the
respective supervisors. Supervisory Colleges should, instead, provide a
framework to enhance effective supervision of international banking groups
on a consolidated and solo basis and inform decision making in this regard.
The Bank of Uganda, on its part, trusts that the deliberations at this particular
college will achieve the afore-mentioned benefits and facilitate further
understanding of the role that Standard Chartered Bank plays in the different
African economies.
With regard to the regional regulators present here today, it is my ardent hope
that we shall all benefit from information sharing about our experiences in
our respective jurisdictions. I believe that the Prudential Regulatory
Authority will in turn provide feedback about its expectations of the Standard
Chartered Bank Group vis-à-vis its subsidiaries in the African region.
Finally, let me take this opportunity, once again, to thank the Home regulator,
the Prudential Regulation Authority, for its recognition of the importance of
the Standard Chartered Bank's presence in Africa.
I trust that this supervisory college will strengthen cooperation, collaboration
and communication between the Prudential Regulatory Authority and the
supervisors of the bank in Africa.
With these few remarks, it is now my honour to declare the Supervisory
College for Standard Chartered Bank, Africa, 2016 officially open.
Louis Kasekende (PhD)
DEPUTY GOVERNOR