Formed 1994 Parent agency Bank of Uganda | Jurisdiction Uganda Website Homepage | |
Headquarters Bank of Uganda
37-45 Kampala Road
Kampala, Uganda | ||
The Uganda Deposit Protection Fund (UDPF) is a Uganda government agency providing deposit insurance to depositors in Ugandan banks and deposit-taking microfinance institutions.The UDPF was created in July 1994.
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Location
The headquarters of UDPF are located within the premises of the Bank of Uganda, at 37-45 Kampala Road, in Kampala, the capital and largest city of Uganda. The coordinates of the headquarters of the agency are 00°18'50.0"N, 32°34'47.0"E (Latitude:0.313903; Longitude:32.579711).
Overview
As at 31 December 2015, Bank of Uganda, which at that time administered the fund, held USh312.8 billion belonging to UDPF. The bank also held another USh9.6 billion belonging to the Uganda Microfinance Deposit Protection Fund (UMDPF), which the central bank also administers.
Legislation passed in 2016 provides for merging of UDPF for commercial banks and UMDPF for deposit-taking microfinance institutions, to form one agency, separate from the central bank. Those changes have not yet been implemented as at August 2016.
Operations
The Uganda Deposit Protection Fund is funded by premiums charged to every licensed deposit-accepting financial institution in the country. Each account is protected up to UGX:5 million. The law provides for all depositors to be paid within 90 days of a bank failure and that the failing institution must be sold by the auctioning of its assets within six months of its seizure by the central bank. If the central bank determines that the failed institution will fetch a better economic return, if sold as a whole, then it will re-open under new ownership and management, provided the new owners and managers meet the approval of the BoU.
History
Following the collapse of Teefe Bank in 1993, the Bank of Uganda had to reimburse depositors from the coffers of the central bank, thereby incurring a loss. In July 1994, the Bank of Uganda established the fund, as a department of the central bank, with three objectives:
- To protect small depositors from losing their savings if and when banks failed
- To maintain stability of Uganda's financial sector and payments system.
- To enhance public confidence in the banking system and the financial sector of the country.
Parliament passed the 2004 Financial Institutions Act, which provides for the formation of the Deposit Protection Fund. A similar Microfinance Deposit Protection Fund was created, to protect depositors in Deposit-taking microfinance institutions in 2003.
Efforts are underway to merge the UDPF and the UMDPF into one independent agency covering both commercial banks and microfinance deposit-taking institutions (MDIs).