Govt inaugurates committee to steer revival of Cooperative Bank
Frederick Ngobi Gume
What you need to know:
- The committee will work until it has successfully established and operationalised the National Cooperative Bank
Government has constituted a steering committee that will push for the realization of the revival of a Cooperative Bank.
The committee, which was inaugurated yesterday by Trade State Minister Frederick Ngobi Gume will be in effect until the successful establishment and operationalisation of the National Cooperative Bank.
“Cabinet gave us overwhelming support in this journey of reviving the cooperative bank. We have three months in which we should have studied what led to the downfall of the former cooperative bank and how we should circumvent such,” Mr Gume said yesterday, noting that the new bank will not inherit liabilities from the defunct Cooperative Bank, which was closed by government in 1999.
Uganda Cooperative Alliance is currently overseeing the process through which the National Cooperative Bank will be established.
Mr Austin Nyakubaho, the Uganda Cooperative Alliance lobby and advocacy expert, said at the inauguration that after the steering committee has completed the task of establishing the bank, responsibility of running it will be transferred to a management team under National Cooperative Bank.
He further indicated that that the committee will submit regular reports to State Ministry for Cooperatives and other relevant stakeholders.
“The main objectives of the steering committee is to develop a comprehensive roadmap for the establishment of the National Cooperative Bank outlining necessary steps, milestones and timelines,” Mr Nyakubaho said.
Uganda Cooperative Alliance was the biggest shareholder in Cooperative Bank, established in the 1960s.
The banks was closed over a host of challenges, among which included mismanagement, fraud, poor credit policies and practices and appointment of incompetent people into senior management positions.
Other problems that plagued the bank in the run up to its closure included government interference, insider lending and failure by Bank of Uganda to fraud and insider trading.
Reports from Uganda Cooperative Alliance indicate that the collapse of the Cooperative Bank meant that most of the country’s co-operative societies could no longer access low interest credit in form of crop finance to continue purchasing commodities such as coffee, cotton, maize and others from the farmers.
