Louis Kasekende: Bank of Uganda’s instruments to respond to inflationary pressures Remarks by Dr Louis Kasekende, Deputy Governor of the Bank of Uganda, at a dinner hosted by DFCU Bank, Kampala, 5 May 2011. * * * The Chairman and Board of Directors of DFCU Bank Limited; Senior Management of DFCU Bank Limited; Chief Executives of various institutions; Distinguished Guests; Ladies and Gentlemen  The profile of DFCU Bank Limited reveals a common transformation process that has occurred in Uganda’s banking industry over the past 10 years;  Upon acquisition of the then Gold Trust Bank Limited by DFCU Limited, DFCU Bank Limited was licenced as a commercial bank in 2000;  Over the last three years, DFCU Bank limited witnessed impressive growth in the following key performance indicators: Item Deposits Ugx. 127.0 bn Ugx. 220.8 bn Ugx. 489.7 bn Assets Ugx. 209.4 bn Ugx. 493.5 bn Ugx. 817.0 bn Ugx.276.9 bn Ugx. 405.0 bn Ugx. 40.9 bn Ugx. 68.9 bn Ugx. 13.6 bn Ugx. 21.1 bn Loans/Advs Core Capital Ugx. 21.7 bn Net Profit Branches ATMs  DFCU Bank Limited has all through the past period maintained full compliance with statutory requirements on capital adequacy, which is a key performance indicator;  DFCU Bank Limited has been able to roll-out a number of financial products, which include; i) Savings Plus Foreign Accounts (Diaspora); ii) Women in Business Accounts; iii) Access Plus Loans; iv) Tax Loans; v) Contract Finance; vi) Commodity Finance; vii) Working Capital Loans; viii) Internet Banking; BIS central bankers’ speeches  Behind this impressive performance of DFCU Bank Limited is the financial support in terms of short to long-term loans drawn from committed partners under the umbrella of the parent company, DFCU Limited. These shareholders include; i) PROPARCO; ii) NORFUND; iii) CDC; iv) FMO; v) EIB; vi) KFW  The above impressive performance has qualified DFCU Bank Limited into a major contributor in the development of Uganda’s financial sector, with a sizeable portion of the market share;  Turning to Bank of Uganda, I wish to re-affirm that as a monetary policy and regulatory authority, the mission of “Maintaining price stability and a sound financial system” remains paramount.  On the monetary front, the recent unfolding inflationary pressures have been proactively responded to using a package of instruments, which include;   i) Pursuing a tight monetary policy stance to regulate money supply; ii) Tactical interventions into the foreign exchange market to manage and minimize sudden fluctuations in the exchange rate; On the regulatory front, the following have been applied to ensure soundness and stability of the financial sector: i) Conducting regular on-site examinations and off-site surveillance of supervised financial institutions in order to initiate prompt corrective actions as warranted; ii) Enhancing risk management framework in all supervised financial institutions; iii) Implementation of risk-based supervision to foster timely identification, measurement, monitoring and controls of risks inherent in the financial sector; iv) Periodic reviews of the legal and regulatory framework to ensure update with current developments in the financial sector; v) Aligning the regulatory framework with international standards especially after the recent global financial crisis; vi) To facilitate innovation through amendment of the legal and regulatory framework to permit the following: i) Implement mobile money banking; ii) Bancassurance; iii) Islamic Banking & Finance products. Rolling out guidelines for financial literacy and consumer protection. BIS central bankers’ speeches