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Action on banking sector ‘frauds’

Action on banking sector ‘frauds’

Prime Minister Robinah Nabanja addressing parliament (courtesy photo)

Prime Minister Robinah Nabbanja has taken action in response to a growing number of complaints from bank customers regarding unauthorized money withdrawals from their accounts. She has instructed the Bank of Uganda (BoU) to conduct an investigation into the existence of syndicates operating within the banking sector.

The Prime Minister’s move aims to safeguard customers from losing their money through mysterious and illicit means. This development underscores the escalating concerns surrounding financial security in Ugandan banks.

During her address to Parliament, Prime Minister Nabbanja expressed her intention to inform the Bank of Uganda about these allegations and called for a report from the Ministry of Finance. She also highlighted that some individuals within the Parish development model (PDM) initiative had been victims of fraud. This implies that even government-backed programs may not be immune to financial misconduct, further intensifying the need for a comprehensive investigation.

The urgency of this directive is further accentuated by the seeming silence from the Bank of Uganda in the face of mounting complaints about fraudulent activities within the banking sector. Customers have reported instances of unauthorized withdrawals, casting doubt on the effectiveness of the existing security measures.

One notable case involves a customer who alleged that UGX 10 million had been withdrawn from their Equity Bank account without their knowledge. While the bank denied any wrongdoing and attributed the loss to the customer’s phone being stolen, this incident reflects the overarching issue of customers feeling helpless and unheard in the face of such losses. It demonstrates the need for enhanced communication between banks and their clients when such incidents occur.

In a separate but equally alarming case, a Centenary Bank customer disclosed that UGX 100 million had been withdrawn from her account by unidentified individuals. Fortunately, Centenary Bank was able to investigate and discovered an internal staff member’s involvement in collaboration with a fraudster. The bank took swift action by referring the staff member to the police and returning the customer’s funds. This scenario underscores the importance of robust internal controls and vigilance in preventing fraud within financial institutions.

Overall, this directive from Prime Minister Nabbanja signifies the government’s commitment to addressing the challenges faced by Ugandan bank customers in safeguarding their funds. It emphasizes the necessity for increased transparency, security, and cooperation between banks and their clients to ensure that the financial sector remains a trustworthy and secure environment for all.

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