How did NSSF fail to know that Crane Bank, before its collapse, was not remitting contributions?

The issue this week is about a bank that did not pay workers’ savings to the National Social Security Fund (NSSF). According to court documents, Bank of Uganda accuses Kampala businessman and property mogul Sudhir Ruparelia of failing or refusing to remit more than Shs52 billion in workers’ contributions to the NSSF.

Dear reader: National Social Security Fund (NSSF) carried out a Compliance Audit on Crane Bank in 2008 for which all arrears discovered were paid by the Bank.
Through Whistleblowers, NSSF subsequently discovered that Crane Bank had provided inaccurate payrolls for the Compliance Audit; wherein Crane Bank omitted or grossly under-declared the salaries of mostly its expatriate non-Ugandan staff. The whistleblower belongs to a small group of Indian expatriates who were brought in to work for the Bank but did not appear on the regular payroll of the Bank. Additionally, their details were not available to us in our routine inspections. These are the employees who were colluding with the employer Crane Bank not to remit to their NSSF. They only came out to whistle blow after they realised that the bank had been taken over.
In March 2017, after all documents were availed by the Receiver Bank of Uganda to NSSF, another Compliance Audit was done and it is the one that yielded the Shs52 billion. (Shs12.7 billion is the arrears and interest due to members, and Shs39.3 billion being the statutory penalty).
Note that NSSF’s review of the local payroll revealed that the NSSF remittances were consistent with the provided figures and no arrears are outstanding.

Therefore, the current Crane Bank arrears arise from non-remittance and under declaration of the expatriate non-Ugandan staff payroll.

Other issues
Here are some of the issues of Sudhir Ruparelia:
Fraud. Bank of Uganda states that the property mogul fraudulently took out $92.8m (about Shs334b) and another Shs8.2 billion of depositors’ money from Crane Bank for personal gain.
Breaking the laws. The Central Bank submitted evidence showing that Mr Ruparelia had been violating the laws which had been put in place to regulate and prevent commercial banks from failing or collapsing.

Answered by Richard Byarugaba, managing director, National Social Security Fund