TABLE OF CONTENTS
CHAPTER ONE ................................................... : ........................................................................ 1
INTRODUCTION .......................................................................................... : ............................. 1
1.0 Introduction .............................................................................................................................. 1
1.1 Background of the Study .................................. · ....................................................................... 1
1.2 Problem Statement ............... ................................................................................................. 2
1.3 Objectives ofthe Study ............................................ : ............................................................... 2
1.3.1 General Objectives ................................................................................................................. 2
1.3.2 Specific Objectives ....... , ...................................... " .............................................................. 2
1.4 Research questions ....... : ........................................................................................................... 3
1.5. Scope ofthe study ...... : ............................................................................................................. 3
1.6. Significance ofthe study ......... .' .. : ......... .................................................................................... 3
1. 7 Methodology ............................................................................................................................ 4
1.8 Literature review ..................... : ................................................................................................. ~
CI-IAPTER TWO ....... ........................................................................... .. ...................................... 7
LEGAL FRAMEWORK USED IN REGULATION OF BANKING SECTOR IN
UGANDA ....................................................................................................................................... 7
2.1 The regulation of banking sector .............................................................................................. 7 . CHAPTER THREE .................................................................................................................... 18
LEGAL CHALLENGES FACED BY CENTRAL BANK IN REGULATING BANKING
SECTOR IN UGANDA ........................... · ................................................................................... 18
'
3. 1 Introduction .... ..................................................................................................... ~ ......... .......... 18
3.2 Legal Challenges Faced in In Regulation of Banking Sector In Uganda .......................... : .... 19 . .'
3 .2.1 Challenge of offering legal advice ....................................................................................... 19
2.2.2 Challenges of duty of due diligence owed by the bank ........... ...... ....................... ... ............ 20
3.4 Conclusion .............................................................................................................................. 33
CI-IAPTER FOUR ........... ............................... .................... ......................................................... 34
CAUSES OF COMMERCIAL BANK FAILURE IN UGANDA .......................................... 34
4. 1 Loan 1nanagement ............................................ ....................................................................... 35
v
4.3. Macro economic circumstances ............................................................................................. 36
4.4. Insider dealing ..................................................................................................................... 36
4.5. Lending to high risk borrower ............................................................................................... 36
4.6. Under capitalisation ............................................................................ , .................................. 36
4.7. Liquidity suppmt and prudential regulation .......................................................................... 37
4.8. Inadequate infrastructure in accounting and law ................................................................... 37
4.9. Poor bank supervision and regulation .................................................................................. .38
4.1 0. Government interference ..................................................................................................... 38
4.2.1. Fraud and corruption .......................................................................................................... 38
4.1.3. Political patronage .......................................... : ................................................................... 39
4.1.4. Earnings .............................................................................................................................. 39
4.1.5. Failure to honor the regulation and instruction ................................................................... 40
CHAPTER FIVE ........................................................................................................................ 41
SUMMARY OF FINDINGS, CONCLUSION AND TRECOMENDATION ....................... 41
5.0 Introduction ............................................................................................................................. 41
5.1 Research findings .................... , ............................................................................................... 41
5.2Recomendations ................................................................................ : ...................................... 43
5.2.3 Enacting a code of conduct ................................................................................................. 44
5 .2.6 Enacting adquate law .................................................................... : ...................................... 44
5 .2. 7 Focus on risk management strategy ..................................................................................... 45
5.2.8 Consumer protection and fairness of contractual terms ....................................................... 46
5 .2. 9 Banking Services Act ............................................................................... """ ..................... 46
5 .2.1 0 Legislators should ask for consultations .................................... , ...................................... 46
5.2.1.1 Guiding financial institutions .......................................................................................... 46
5 .2.1.2 Amending the penal code ................................................................................................ 4 7
5.3 Conclusion ............................................................................................................................. 4 7
